Timber Price for Businesses Goes Up
This year Russia increases forest utilization fees. The fees may match export prices in the future.
The Federal forest area to timber volume unit rate increased from 1.4 to 1.49. The increase affects both timber procurers and those leasing forest for “industrial” mushroom and berry collection.
This is planned indexation reflecting the currency rate change and inflation. The President urged not to go around in circle when resolving ecological issues. “Previous fees were set back in 2007. However, the overall economic and timber logging situation in Russia has changed as well as the forest legislation”, - Russian Federal Forestry Agency (FFA) informed the Russian Gazeta. We didn’t change fee rates in 2009-2014 due to support rendered to forest industry companies, - added the FFA representative.
Industry experts believe the previous fees are extremely low and do not correspond to the real revenue the wood procurement delivers.
Scientists and ecological society have been appealing to switch to market approach and link the fee rate to internal and export prices. This will inject more funds into forestry therefore generating more contribution to federal budget.
However, the FFA realizes the sudden fee increase may be extremely challenging to S&M business in forest and related areas. Therefore, the industry is still looking for the most efficient and rational way to form the fees taking into account all interested parties.
January 9, 2017