4. Study of market and dynamics of prices on raw material and production

A research on the market and prices on production of logging branch was held. It is necessary to put special emphasis on the fact that it is vital to understand the difference between prices of logging at the yard and purchase price for industrial complexes and processing enterprises, because they differ on the value of transportation, can constitute up to half of raw material price. Prices on logging production have drastically increased during past six years. However, their level is close to satiety. The growth of price on plank timber has already lead to unprofitability of many sawmill enterprises. Further approach of prices on pulpwood to the worldwide level will lead to decrease of profitability of pulp and paper industry and will demand dramatic investments in production modernization.

In connection with the growth of value on energy resources and general growth of prices on manufactured goods, prices on material resources are also rising stably, from season to season. For example, regional fluctuations of prices on CLM are for the most part connected to the division of production marketing outlets between principal oil companies. The degree of remoteness and transportation accessibility of forest regions has indisputable effect on the variability of prices on raw materials.

You can see the dynamics of prices on raw material and production in Appendix 4.