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Market News Digest: June 2022


As my stay in Vietnam continues I have more and more information coming from all around. Thus, market awareness and understanding are growing in myself. After two weeks, I can share many amazing details on the business environment, wood industry, market situation but don’t really want to spoiler. If someone find this interesting feel free to comment on this brief and I definitely get back with private message. Here are some points I can cover for these who is interested to develop Vietnamese market for their products:   

  •    Current market situation
  •    Most wanted products
  •    Most developed industries
  •    Business environment
  •    Pricing and supply chains including impact of the war in Europe
  •    Prospects and opportunities
  •    Competition

For my potential and existing Vietnamese clients, please consider I’m here till the end of the month. If you have any questions, queries or just want to meet up to discuss potential prospects – feel free to contact me over the webpage or LinkedIn.   

War in Ukraine and others influencers.

Regret but I still have to start with this topic as it has massive impact on the situation in wood and wood product industries. The clearest outcome of this war is shortage of the material that drives prices up for nearly everything. I don’t mean I discover America with this statement, I just want to fix the status quo and let everyone suggest how far this might get us.

The other influencer is hyperinflation in the world that definitely takes its significant part in price increase. Energy price increase lead to production price increase, that lead to log price increase, timber price increase and end-product price increase. We are looping in these co-dependent circumstances with no chance to out in predictable future.

Supply chain or simple logistics is the other bottleneck. Even when you have your product ready you often have no capacity to get it delivered to your destination that bring you to the same loop shortage-increased cost-increased price.

Some of Ukrainian producers restarted their production and start loading to EU, China and India. We have received several loads from Ukrainian suppliers and there were no miracles. Quality is very poor whatever angle you stare, price is double comparing what the same supplier offer to their Chinese or Indian clients. Regret this.


It is widely discussed (speculated) in media and among the professionals what would happen to Russian timber industry. Well, we can look back a little and see what is the current situation.

The decline in export volumes due to EU sanctions against the backdrop of rising transportation tariffs and a stronger ruble made the production of lumber unprofitable in the Russian North-West. In April 2022, the volume of lumber imports to China from Russia decreased by 11% to 1.04Mcbm.

The exports of Russian lumber to Japan also decreased in April by 22.1% to 58.4 thousand m3. If a year ago Russia was in second place in terms of lumber volume exports to Japan, then last April it lost two places at once. Japanese house-building companies began to look for new suppliers of lumber after the largest transport companies Maersk and MSC stopped transporting Russian lumber on March 1.

The Russian domestic market will not be able to absorb the volumes released from exports (it needs about 10 million m3). The price of lumber has already begun to fall. The domestic market will not swallow the volumes that are exported. Russia produces about 40 million m3 of lumber per year. (According to Russian state statistics, the volume of industrial production of lumber in Russia in 2021 amounted to 30.6 million m3). The remaining volumes should make its way to Asia, Egypt, Israel, Turkey, the United Arab Emirates.

By now, lumber production in Russia is at the level of the previous year. Inventories at Russian sawmills are growing.

Exports of lumber to Europe. The main market for sawmills in the Northwest of Russia, will end on July 9, when the grace period for deliveries under contracts concluded before the imposition of sanctions by the European Union ends. So from July 10, sawmilling will begin to stop.

Exports of lumber to China have become unprofitable for companies not to mention big problems associated with container transportation. For shipment to China only the railway remains which was and remains a bottleneck in logistics. The situation is difficult and main problem is not to sell the goods, but to bring them. There is practically no logistics. Because of this, enterprises are forced to stop.

Cherry on the cake – lumber exporters are also negatively affected by the strengthening of the ruble, caused by a drop in imports into the country. Export revenue in ruble terms has decreased.

Problems also expected in pellet production. Up to 80% of the pellets produced in Russia were sent to EU countries. Besides the market and energy value, pellet production is the technological link in production chain. Dust and chips must be utilized and until you find the way to utilize it remains just a constantly growing pile of waste.


I could place this topic to U.S. but I prefer to focus on Vietnam, where I currently stay and may be staying in U.S. I would place it in the other category.

In 2022 U.S. doubled imports of plywood from Vietnam to 146 thousand m3 and this is the 1st place among suppliers followed by Brazil and Russia. BTW, significant part of birch plywood made of birch with Russian origin. Just to think about the future, U.S. restricted to import Brazilian plywood from May 2022. Russia’s plywood prices doubled this year in U.S. and guess what is going to happen now?

North Europe

Wood import in Finland dipped 40%. Finland’s 1stQ import of wood was 1,87Mcbm and this is 40% decrease comparing with 2021. Russia was No.1 supplier though the volume decrease dsignifically. Export value of forest industry was 3,21Billion EUR and decreased from previous year by 3%.

Sweden’s lumber export to U.S. dipped 8% but this is nothing as volumes increased 35% in Q1 but the price increased 18%.  

Furniture industry continued to be gloomy.


Biggest timber consuming industry in UK is construction, therefore I focused on figures reflecting the situation in contraction sector. Prospects for strong demand for wood products in the UK continuing this year and into 2023 look increasingly uncertain. In early May the Bank of England warned that Britain’s economy could plunge into recession before the end of this year.

The gloomy outlook statement came as the Bank’s monetary policy committee raised interest rates to tackle spiraling inflation made worse by Russia’s war in Ukraine and the impact on supply chains from COVID lockdowns in China.

Economists at the Resolution Foundation said the Bank’s projections showed the average household in Britain would lose about £1,200 this year from the cost of living squeeze.

Reflecting this uncertainty in the wider economy, the UK Construction Products Association sees a dramatic slowing in growth in its latest forecast published in early May. In previous years, the predicted 2.8% growth in construction output anticipated by the CPA would be cause for celebration.

According to CPA, demand has continued to be strong across the UK construction industry in the second quarter, and the current project pipeline suggests that this will support activity levels until at least the third quarter of this year.

Prior to the conflict in Ukraine, UK construction was already facing labor and product availability issues due to disruption during COVID pandemic and effects of Brexit. Rising energy costs were driving near-record price increases in construction products and the conflict has exacerbated this issue, according to CPA.

Private housing, the largest construction sector in the UK, remains strong, with housebuilders reporting resilient demand. Longer term, there must be questions over consumer confidence but CPA forecasts output in this sector to rise by 1% in both 2022 and 2023. This contrasts with the 3% per year growth forecast three months ago.

The fastest growth is expected in the industrial sector, in which output is forecast to rise by 9.8% in 2022 and 9.3% in 2023, due to a strong pipeline of warehouse projects, resulting from a long-term shift towards online shopping.

Trends in Europe

At the beginning of the year, the strong inflationary tendencies on the raw materials markets left their mark on the balance sheets of the European wood industry and related branches of the economy. This increase in price was also responsible for the sometimes significant growth in sales in many sectors. 

Sales in the first quarter of 2022 in the European timber industry increased more or less but in every country. The fact that one can speak of below-average growth in view of an increase in the construction-related sector and in wood-based materials shows the extent of the current dynamic. 

Influencing factors in the construction-related area of the wood industry included limited material availability and increased material and financing costs. 

The mood in key sectors of the wood, plastics and furniture industry continued to be gloomy.


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White peat

white peat
Sphagnum white

White Peat – Used as a basis of many substrates.

Baltic Peat Moss is a relatively young white peat, partially decomposed sphagnum moss (Sphagnum is a genus of approximately 380 accepted species of mosses, commonly known as “peat moss“) that can retain between 10 to 12 times its own weight in water.

Structure of peat at the magnification of the electron microscope:

Total porosity, about 95%¾
Big specific surface area, about 200 m2/g¾
High liquid binding ability, 600-800 l/m3¾
Low volume weight, about 160-180 kg/m3

Milled sphagnum is an ideal germination medium

Milled sphagnum is a fine grade of sphagnum moss. In texture it resembles a coarse grade of chunky
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