Russian lumber production has fallen 7% this year, according to Wood Resources International.

Logging has declined by about 9%, while spruce sawlog prices fell 7% in the third quarter. Log costs have now fallen from record highs in the fourth quarter of 2007 to two-year lows in the third quarter of 2008.

Pine log prices have increased slightly because the species is reasonably active on the export market.

Wood Resources predicts a continuing slowdown in production in the coming months, leading to further weakening of sawlog prices.

It believes companies will not change their policy of reducing reliance on softwood logs from Russia, even after the newly-announced postponement of increased duties on roundwood exports from Russia.

It says softwood sawlog shipments to Finland will probably continue to decline as Finnish sawmills consume less in 2009.