At the beginning of May, the next round of exchange auctions will begin for the conclusion of forward contracts for the second half of 2025.

As a reminder, SFE “Forests of Ukraine” first introduced the practice of six-month fixed-price contracts at the end of last year. At that time, for deliveries in the first half of 2025, the enterprise’s branches offered 416,000 m³ of timber, of which 351,000 m³ were sold (including 168,000 m³ of roundwood and 156,000 m³ of industrial fuelwood).

The experiment proved successful. As of the end of April, 64% of the roundwood volume and 73% of the industrial fuelwood volume had been delivered to buyers, which is fully in line with the delivery schedule.

Long-term contracts contribute to effective planning and the development of production activities, both for processing enterprises and for SFE “Forests of Ukraine.” Thus, positive result is our shared achievement and opens the door to scaling up this new practice.

As previously announced by SFE “Forests of Ukraine,” the volume of timber allocated for forward contracts with delivery in the second half of 2025 has been increased to 30% of the enterprise’s planned harvest.

In total, 1.56 million m³ of timber have been offered at the semi-annual auctions (including 624.4 thousand m³ of roundwood and 928.4 thousand m³ of fuelwood). This is nearly four times more than was offered last year.

Another important update. Based on suggestions from market participants, the method for determining starting prices for timber products has been improved.

Firstly, starting prices are now calculated based on actual transaction prices (excluding speculative purchases that did not result in actual deliveries).

Secondly, the reference period used to calculate starting prices has been extended, which helps to smooth out temporary price spikes.

Therefore, for the Q3 2025 auctions and forward contracts for the second half of 2025,  starting prices are based on three indicators: actual transaction prices from Q4 2024 and Q1 2025, as well as the starting prices from Q2 2025 auctions (for identical assortments with the corresponding delivery basis).

Thus, the enterprise has created the conditions for price stabilization in the timber market; however, auction results will ultimately depend on demand. As always, prices will be determined solely by buyers.

SFE “Forests of Ukraine” remains open to dialogue with market participants regarding further improvement of the timber sales system.