SFE “Forests of Ukraine” has fulfilled the commitments agreed with market participants at the March Forum in Zhytomyr
Thirty percent of the planned harvest volume was offered at the forward semi-annual auctions. Following proposals from the business community, the algorithm for setting starting prices was revised, resulting in a significant reduction.
However, dialogue with the market remains ongoing. During a meeting with representatives of the European Business Association, key concerns currently facing major producers were discussed.
1.Amending the Law on Environmental Impact Assessment (EIA)
Due to restrictions that do not exist in the EU, Ukraine’s industry loses millions of cubic meters of fuelwood annually. The export of board-based products is artificially limited. One of the main reasons is the lengthy and overly bureaucratic procedure for forest restoration after natural disasters, fires, and other emergencies. Representatives of the European Business Association expressed interest in exploring the EIA issue in greater depth and taking part in the legislative amendment process.
2.Strengthening accountability of market participants
There are cases where winning bidders fail to take up the contracted volume, while other businesses suffer from a lack of available resources. Representatives of the Association pointed out such instances, noting that the current amount of the guarantee deposit is not a sufficient safeguard against bad-faith behavior by certain auction participants.
We are open to consider the Association’s proposals. Strengthening safeguards is appropriate, provided it does not lead to reduced competition, restricted access to resources, or a deterioration in business conditions.
3.Reducing deliveries from upper storage sites
In 2024, upper storage sites at SFE “Forests of Ukraine” accounted for 16% of timber shipments. In Q1 2025, this share dropped to only 4%. Our position fully aligns with that of EBA representatives — deliveries from upper storage sites should be phased out.
The only issue is the capacity of the existing infrastructure. All new forest roads built by SFE “Forests of Ukraine” are designed to include intermediate storage sites.
4.Reducing the density of the auction schedule
In recent months, timber auctions have become highly competitive. Participants competing for resources in multiple regions have suggested making the auction schedule less dense, so they can physically keep track of all the relevant lots.
We are ready to discuss this proposal together with representatives of the exchanges. SFE “Forests of Ukraine” will support any initiatives that enhance competition and market transparency and contribute to creating more convenient conditions for businesses.
5.Improving the effectiveness of claims handling
Timber is a perishable commodity. SFE “Forests of Ukraine” signs contracts for the supply of products that are still planned for harvesting. Therefore, questions related to the quality of timber may arise in one way or another. EBA representatives understand this, but note that during periods of rising prices, the issue becomes more sensitive.
To respond more promptly to buyer inquiries and resolve disputes, SFE “Forests of Ukraine” will introduce a dedicated position for a claims handling specialist.