As the Russian invasion of Ukraine stretches into its third year, the international trade landscape is experiencing significant upheavals. The ongoing conflict has led to expanded sanctions on Russian exports, particularly affecting the global timber market. New research indicates that the invasion’s impacts could extend well beyond the immediate economic disruptions, potentially causing long-term shifts in global trade patterns and environmental practices.
The study, published in Forest Policy and Economics, employs the Global Forest Products Market (GFPM) model to project the consequences of the conflict on the global wood products markets. Researchers simulated two scenarios: one assuming no invasion and another factoring in the current sanctions on Russian wood products and the disruption of Ukrainian trade due to military operations. These models provided insights into both the near-term and long-term effects on the global wood product markets.
In the short term, the research predicts a noticeable increase in the prices of key timber products. Rajan Parajuli, associate professor of forest economics and policy at North Carolina State University and the study’s corresponding author, explains that industrial roundwood and finished wood products could see price hikes of up to 3% within ten years following the invasion’s end. “Russia is a major global supplier of forest products. Sanctions severely impact their export capacity, and the conflict in Ukraine disrupts timber harvesting, further straining supply,” Parajuli said.
These short-term disruptions are already affecting global trade flows, with countries that relied on Russian and Ukrainian timber seeking alternative sources. The resulting shifts in supply chains are expected to have broad economic implications, particularly in regions where timber plays a significant role in industry and exports.
While the immediate impacts are concerning, the study also highlights potential long-term changes. The researchers project that Russia could eventually recover much of its timber market share, particularly in industrial timber, by 2050. The model assumes the invasion will end by 2025, with global markets beginning to stabilize 10 to 30 years after that.
However, not all sectors are expected to return to pre-invasion levels. Parajuli notes that certain wood product markets, such as wood-based panels, paper, and paperboard, may not fully recover in Russia or Ukraine. “These are smaller markets, and our model suggests that if production is halted for an extended period, other countries will fill the gap,” he explained. The shift in production could lead resource-rich countries like the United States, Canada, China, and several Asian nations to increase their output to capitalize on higher prices.
The study raises concerns about the environmental consequences of these shifts. Increased production in countries looking to fill the gap left by Russia and Ukraine could drive economic growth, but it might also lead to weakened environmental regulations and a rise in deforestation. This is particularly troubling for developing nations that are already grappling with high levels of illegal logging.
Researchers warn that the global push to meet timber demand could exacerbate environmental degradation in these regions. As timber-rich countries ramp up logging to take advantage of higher prices, the risk of environmental harm, including biodiversity loss and deforestation, increases. The study underscores the need for careful management of forest resources to mitigate these risks.
The findings suggest that the Russian invasion of Ukraine will have far-reaching consequences, not just in the short term but potentially for decades to come. The disruption in global wood product markets could lead to permanent changes in trade patterns, with significant economic and environmental ramifications. As the world adjusts to these new realities, policymakers and industry leaders will need to balance economic opportunities with the urgent need to protect the environment.
The full study, “Projected Effects of the Russian Invasion of Ukraine on Global Forest Products Markets,” provides a detailed analysis of these trends and is available in the journal Forest Policy and Economics. The research, conducted by Rajan Parajuli and co-authors Prakash Nepal and Austin Lamica, offers a comprehensive look at how this conflict may reshape the global timber industry.
