Timber sales remain sluggish in March: National decision reached on tax exemption for wood from first thinning – timber sales can now commence

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The aggregate January-March purchase amount was 4.6 million cubic metres – likewise less than half of the amount that was procured in the corresponding period of 2007.  

January-March purchases of pine logs came to 35%, spruce logs to 26% and birch logs to 49% of the procurement volumes in the corresponding period of the previous year. Purchases of pine pulpwood came to 66%, spruce pulpwood to 44% and birch pulpwood to 74% of the previous year’s volumes.  

Compared to March 2007, stumpage prices of pine logs have fallen about one percent and the prices of spruce logs and pulpwood are down 3%. Stumpage prices of birch logs are 5% higher and the prices of pine and spruce pulpwood are 8% higher than in March 2007. The average stumpage price of pine and spruce logs was €57 and the price of birch logs €48 per cubic metre this March. The average stumpage price of pine and birch pulpwood was €16 per cubic metre and the average stumpage price of spruce pulpwood was €23 per cubic metre.

Demand for pulpwood remains good, but logs are also needed. Summer logging locations are topical now. Thinning should be carried out in time because this promotes faster growth in trees that are left standing and thus increases yields.

Following Commission approval, wood from first thinning will be tax exempt from the beginning of April

The Ministry of Finance and the Ministry of Agriculture and Forestry have cooperated to investigate how EU regulations on state subsidies affect the granting of tax exemption to wood from first thinning. The Commission will be informed of a provisional tax exemption for income from first thinning stands, thus ensuring acceptability from the perspective of state-subsidy regulations. Once the Commission issues a decision on the matter, the tax exemption will take effect retrospectively from 1 April 2008.

Forest owners are therefore either receiving a direct subsidy for first thinning or they are permitted to sell first-thinning wood free of tax. Now that the matter has been resolved, it should no longer obstruct timber sales.

Working group to assess operating prerequisites of the forest industry in Finland 

A working group appointed by the Prime Minister’s Office continues its work with proposals for measures to improve the operating prerequisites for the Finnish forest industry and forest sector as well as to increase the availability of domestic wood.

In order to improve the market entry of wood, the resources of Forestry Centres need to concentrate on the provision of fast-acting advice and marketing, as was suggested by the working group led by Esko Aho, President of the Finnish Innovation Fund SITRA. Good cooperation within the forest sector and the active provision of support by all organisations for these efforts are prerequisites for success. In addition, data on forest resources must be made widely available to increase the supply of services and the provision of advice should support attainment of the targets of forest-plans.

Additional information: Anu Islander, Senior Advisor, Forestry,
tel. +358 9 132 6678