High costs and sanctions weigh on Russia’s lumber sector

Russia’s lumber industry is undergoing structural disruption due to the ongoing conflict in Ukraine and Western sanctions. International reports indicate that Russia’s lumber exports have contracted by more than one-third compared to pre-conflict levels, impacted by export restrictions and rising international financing costs. As a sector contributing approximately 1% to Russia’s GDP, these shifts are generating widespread economic concerns. With an estimated 82 billion cubic meters of exploitable forest resources, Russia was the world’s second-largest lumber exporter before the conflict. However, following embargoes imposed by the EU and the U.S., the ...