Business welcomes reduction in starting prices for timber

16/ 04/ 2025

The European Business Association welcomes the pilot decision of the state enterprise Forests of Ukraine to set starting prices for timber auctions in Q3 based on the average weighted selling prices of Q1. This was stated in an official announcement by the State Forest Resources Agency. This step moves closer to addressing the request of the EBA’s Woodworking and Furniture Committee, which had previously appealed to state authorities regarding the need to increase timber harvesting volumes and set economically justified prices. At the same time, industry experts noted that in Q1 2025, prices for most timber grades had already increased significantly due to insufficient harvesting volumes. Businesses expect this upward trend in prices to continue under current conditions. Therefore, maintaining the current level of starting prices for timber in the upcoming quarter may negatively impact the financial situation of woodworking enterprises and prevent a return to economically viable raw material prices through trading. This is why business representatives emphasise that starting prices should be set based on the cost of the lot and a certain level of profitability. Such an approach would help stabilise the market, avoid speculative demand at auctions, and ease pressure on woodworking enterprises. Indeed, hype during exchange trading and timber shortages on the market are key drivers of sharp price increases. This adversely affects the competitiveness of woodworking companies both domestically and internationally. According to EBA experts, there is now a critical need to increase timber harvesting volumes to meet both domestic and international obligations. Expanding logging activities would allow woodworking enterprises to fully utilise their capacities, as well as attract greater investment in production growth. In turn, this would increase tax and foreign exchange revenues and support deeper cooperation with the EU.

This step moves closer to addressing the request of the EBA’s Woodworking and Furniture Committee, which had previously appealed to state authorities regarding the need to increase timber harvesting volumes and set economically justified prices.

At the same time, industry experts noted that in Q1 2025, prices for most timber grades had already increased significantly due to insufficient harvesting volumes. Businesses expect this upward trend in prices to continue under current conditions. Therefore, maintaining the current level of starting prices for timber in the upcoming quarter may negatively impact the financial situation of woodworking enterprises and prevent a return to economically viable raw material prices through trading.

This is why business representatives emphasise that starting prices should be set based on the cost of the lot and a certain level of profitability. Such an approach would help stabilise the market, avoid speculative demand at auctions, and ease pressure on woodworking enterprises. Indeed, hype during exchange trading and timber shortages on the market are key drivers of sharp price increases. This adversely affects the competitiveness of woodworking companies both domestically and internationally.

According to EBA experts, there is now a critical need to increase timber harvesting volumes to meet both domestic and international obligations. Expanding logging activities would allow woodworking enterprises to fully utilise their capacities, as well as attract greater investment in production growth. In turn, this would increase tax and foreign exchange revenues and support deeper cooperation with the EU.