Forestry warns against taxes and costs

Production and prices continued to fall while the economic downturn in Finland's main markets in Europe showed no sign of relenting, said Timo Jaatinen, director-general of the Finnish Forest Industries Federation.

He said increased labour and raw material costs could not be transferred to prices while the government had to ease the burden of environmental directives and scrap a planned windfall tax on forestry.

"Domestic decisions can help our competitiveness to be on the winning side once the European economy returns to a growth track," he said.

In its latest review, the Federation said the lengthy slump in construction continued to keep wood products production in the red. Annual sawn timber production was down 4% to 9.3 million m3 in 2012.

Exports by volume were slightly higher with weak demand in Europe compensated by growing demand in the Middle East, North Africa and ongoing rebuilding in Japan.

Raw wood costs, which account for 70% of sawmill production overheads, remained high relative to prices achieved for end products.