Finnish sawn timber production will drop by 10-20% next year, says the Pellervo Economic Research Institute (PTT).

The fall will be caused by declining log supplies from private forest owners and expiration of the forest taxation system at the end of 2005.

The institute also believes annual average export prices will reduce by around 1% in 2005 and 1.5% in 2006.

It says sawn timber consumption remains strong on main export markets in Europe, the US and Japan, but oversupply is affecting prices within Europe.

Domestic commercial fellings are expected to decrease in 2006, with more pulpwood than sawlogs being cut.