Russia supplies Australia and New Zealand with very small quantities of paper and paper products. IndustryEdge continues to express the view that in the face of atrocities, transgressions of sovereign borders, human rights abuses and persistent aggression from Russia, trade is mainly important as a tool to influence Russia’s behaviour. Source: IndustryEdge
In that context, it is important for Australian and New Zealand industry to understand the shape of current trade with Russia, as we prepare for the future of trade with Russia.
Around 40% of Russia’s exports went to China and the remainder mainly to Europe.
Trade between Russia and Australia and New Zealand
The data below shows a summary of relevant Australian and New Zealand imports from Russia in 2021.
In the last five years, neither Australia or New Zealand has imported any pulp or related products from Russia.
On 4 March, the Program for Endorsement of Forest Certification schemes (PEFC) declared wood from Russia to be ‘conflict wood’, as reported by the Australian affiliate Responsible Wood. The FSC followed suit on 8 March in similar, but different language. The declarations appear to cover at least six months.
As the PEFC said in its statement: “All timber originating from Russia and Belarus is ‘conflict timber’ and therefore cannot be used in PEFC-certified products…”.
Essentially, the certification bodies are withdrawing the certification of all products containing wood that originated in Russia and Belarus. In the case of Russia, that means USD12.2 billion of products outlined earlier.
Notably, that includes logs transported to neighbouring countries for processing. Countries identified as being of note are the former Soviet countries, Estonia, Latvia and Lithuania.
For most products, identification will be reasonably straight forward, but for pulp – the input into paper and paper products – it could be more complex.
At the moment, a step wise approach to the supply chain seems prudent. It may be prudent to consider positions on the Russian supply along the continuum:
- Product that has not yet left Russia seems clearest – it is no longer certified and may be illegal to import
- Product en-route to Australia and New Zealand has lost its certification – Government responses are being sought on the status of this supply on arrival, but we note that most, if not all, was procured legally
- Product in warehouses and even in store has lost its certification – it may not prove to be illegal as it was legally imported, but B2B buyers and consumers may not be as forgiving as the law.
It was reported on 10 March that Russia had banned exports of certain materials, including unspecified forestry and wood products. That is a sideshow for domestic purposes, more than anything else.
IndustryEdge thinks the critical point to remember is that no matter how difficult the supply lines become, the industry’s integrity is built on the quality and assurances of supply it provides to customers.
For more information: www.industryedge.com.au
