Jun 16, 2008. /Lesprom.com/. Round timber price reduction averaged to 15% in Russia in May. The offer still exceeds demand, Lesprom Network's Analytical service reported in the monthly wood based panel prices survey. The average price for 1 m3 of 4…6m long sawlog from softwood (pine, fir tree) 16…30 cm in diameter amounted 1.5% up against April; 1m3 of 3…6m long sawlog from hardwood (birch) 16…30 cm in diameter 20% down against last month; 1m3 of 4m long pulpwood from fir tree 6…16cm in diameter (grades 1, 2, 3) cost 18% down against April. The price o 1m3 of 4m long pulpwood from (ordinary) pine 6…16cm in diameter (grades 1, 2, 3) was 23% down against last month; 1m3 of 6m long pulpwood from hardwood (birch) 6…16cm in diameter (grades 1, 2, 3) dropped 13% down against April. Average price gap between manufacturers and traders amounted to 20% in the pulpwood segment and 16% in the sawlog segment in May (against 17.6% and 9%, respectively). The prices listed in the review may vary depending on volume of delivery product destination. The general situation in the spot market of round timber is unfavorable unstable. Offer still exceeds demand in May. It is important to note that this situation does not affect large manufacturers working with constant suppliers and concluding long-term contracts. Small companies working for export are especially sensitive to the situation. Increased duties have aggravated the problem of Russia being unprepared to process the entire volume of logged wood. The situation has affected European countries too. EU cannot agree to an increase of the raw wood export duty by Russia, said Chairman of the European Commission Jose Manuel Barroso. Barroso said that interests of a number of EU countries with developed wood processing industry, in particular, Finland may suffer from this increase. Barroso said that this situation is unacceptable. It is at variance with agreements with Russia. The European Union considers excessive the duties established by Russia on export of raw wood. However, not entire Europe has a similar attitude to the increase of duties. So, for example, Austria, which itself is a supplier in the world markets, benefits from this situation. Countries buying wood from Russia are increasing volumes of purchases at current prices, on the one hand, and are looking for new suppliers, on the other. So, for example, Finland is actively switching to German round timber exporters. Trends of the last month remained in the pulpwood market. The average cost of pulpwood dropped by 18% in May. Sawlog prices are still falling, and the difference between sawlog price and pulpwood price is promptly decreasing. It is due to decreasing demand for Russian raw materials and additional supply of goods by Canada and Scandinavia, caused by a crisis in the USA. The average sawlog price dropped by 15% in Russia in May (due to hard pulpwood price reduction by 20% on the average).