b'THE UNCONTAINEDin general), resource laden but monetarily challenged, Russiamarkets will clearly have a domino effect on wood product becomes an easier, albeit much smaller, export alternative.sourcing.Conflicted Timber For example, Europe imported around 8.5 million cu/m of softwood from Belarus, Russia, and Ukraine in 2021, roughly Shortly after the invasion Western paper producers and10% of total demand, according to WRI figures. So, the question wood manufacturers largely halted operations with Russia. Thisbecomes how will European lumber manufacturers replace the step came with the dropping of certification by the FSC and8.5 million cu/m of wood? Certainly, some of the deficit will be PEFC, on March 2nd which labeled Russian and Belarus (a majorsourced to Scandinavia, which already has an existing supply processor of Russian lumber) as conflict timber. The labelingchain to Europe. But will this bump out Scandinavian exports is critical to the sale of lumber and lumber products to overseasto other markets like the U.S? North American exports might markets. The removal means that the timber cannot be used inalso contribute to Europe but again what other markets will be manufacturing of certified products such as lumber, plywood,bumped in the process and at what cost?pulp, and paper for sale in the global marketplace.For example, Vietnam is rapidly developing a robust wood Under the de-certification rules lumber that was headedproducts sector, will it become a bigger player with Russia on from forest to sawmill and for which certification had alreadythe sidelines? been applied could be placed on the market while lumber inPerhaps of bigger concern is China. With so much of the storage even outside the two countries [Belarus and Russia]imported wood being used in the manufacturing of export for which no certification had been applied is consideredproducts such as furniture, flooring, paper and paper products conflict lumber. and plywood, how will China replace Russian sourcing? No This has an enormous impact on how the global wooddoubt, China will look to known suppliers like Canada, New and wood product markets will function going forwardorZealand and Latin American and African sourcing. And for at least until Russia is welcomed back into the global tradingpurely domestic use, Chinese processors might simply ignore community. The removal of Russia and Belarus from globalthe sanctions and labeling issues and use alternative payment systems. But a larger issue looming is how will Western custom officials handle the enforcement of potentially Russian or Belarussian sourced lumber used in manufactured wood products by third or fourth parties? The use of Russian birch in flooring and other specialty products will force global manufacturers to find alternatives to keep up with demand. And theres little doubt the conflict lumber issue is going to complicate the outlook for global lumber trade for years to come.19'