The devastating events in Ukraine have seen the introduction of economic sanctions against Russia and Belarus, which we fully support as part of the effort to secure a peaceful resolution to this terrible situation.
These important and necessary sanctions bring wider implications for the world economy, including the global timber market. We can, however, reassure you that we are in a strong position to maintain a robust continuity of supply throughout this period.
While domestic timber production has continued to grow in recent years, the UK is still dependent on imports for 70% of its timber needs and the current situation will inevitably have an impact on the global supply and pricing of timber.
To set this in context, according to the Federation of Wooden Pallet & Packaging Manufacturers (FEFPEB), Ukraine exports almost 3million cubic metres of sawn softwood annually while the EU alone imported nearly 8million cubic metres of softwood from Russia and Belarus in 2021. In terms of direct imports to the UK, Russia exported 500,000 cubic metres of softwood to the UK last year – around 5% of total softwood imports – while Ukraine and Belarus are only minor direct sources of softwood in the UK.
The global nature of the timber industry means the impact will be felt throughout European markets and beyond – a sentiment echoed in a recent statement from FEFPEB, which forewarned of “an indirect impact across Europe by unbalancing the market and increasing competition for more limited wood supplies and putting upwards pressure on prices.”
This scenario, combined with escalating labour, haulage and energy costs means that the trading environment remains uncertain at best for the foreseeable future.
Nevertheless, thanks to the strength of our strategic partnerships throughout the supply chain, we currently enjoy strong stocks of timber and are increasing reserves of other essential commodities such as nails and panel products to ensure we can support customers through this challenging period. Our supply is not directly affected by the current situation conflict as Nicklin have no reliance on timber from Russia, Ukraine or Belarus, with our stock procured from the UK and other European markets
It remains a continually changing picture and our teams are working hard to mitigate the impact of this situation, having learned a huge amount from the challenges presented over the past two years of the pandemic.
We remain committed to meeting the timber pallet and packaging needs of our valued customers and will continue to provide updates on this this rapidly evolving situation and any further impacts as they occur.
