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Wet and mild winter is challenging forest operations

10-01-2018

Most of Northern Europe is currently experiencing an unusually wet winter with a lot of rain and mild temperatures. The “soft” conditions are becoming a significant challenge to forest operations and timber transport around the Baltic Sea area;

  • In Sweden, the timber industry BillerudKorsnäs has announced that wood shortage due to the wet conditions is expected to have a negative impact on the 1q earnings of approximately 80-100 million SEK
  • In Latvia, the effects of rain and floods in forestry have been declared a nationwide natural disaster under the Civil Defense and Disaster Management Act
  • In Estonia, the State Forest Company RMK has announced a force majeure to their buyers of pulp- and firewood. Preliminary agreement included 10% reduction from the actual contract, but now RMK allows 30% reduction in the planned volumes

At the same time, demand and prices are good for both the forest owner and the industries in general.

Forecasts are now for a bit of frost – finally. We will in HD Forest make sure to make the most out of any cold period so that our clients can benefit from the good timber prices.

The extreme situation has resulted in certain adjustments in subsidies available for forestry. Deadlines for completion of forest works in the spring will most likely be extended and subsidies for reforestation and drainage are expected to increase in the spring. HD Forest will make sure to take these opportunities into consideration when planning our activities in the forest.

We expect timber demand to continue to be strong in 2018 in the Baltics. Even though harvest is currently restricted by the soft conditions we are confident that we will be able to catch up on the planned forest activities during the rest of the year.


 

 
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