Wood in the rough market in Latvia

Earlier Report Observations

The market for wood in the rough in Latvia expanded from 6.3 million tons in 2018 to 9.2 million tons in 2021. This growth was supported by EU and national legislative changes in 2019 that provided state support programs for the forestry sector, stimulating domestic production. Despite the uncertainty caused by the COVID-19 pandemic in 2020, which disrupted transportation and affected certain wood segments, the market volume continued to rise. In 2021, tax adjustments including increased vehicle taxes for businesses were implemented, while wood remained a key export commodity.

A turning point came in 2022 when the market contracted to 8.6 million tons. The decline was primarily driven by an oversupplied wood market, which depressed prices and made it difficult to sell harvested timber, alongside reduced demand from the construction sector. Additionally, the ban on imports from Russia and Belarus limited the availability of wood resources, further tightening supply conditions.

Recovery followed in 2023 as the market grew to 9.0 million tons. This rebound was led by Latvijas valsts meži (LVM), the state forestry company, which achieved record profits and increased wood product output through cooperation with leading processors. Concurrently, the EU proposed new restrictions on using primary woody biomass for energy, aiming to cap consumption at 2017-2022 levels. In subsequent years, updated national standards for roundwood measurement improved transparency, and the permitted use of wooden building products in construction was expanded, allowing structures up to six stories high.

Production wood in the rough in Latvia

In kind, 2018-2021, K t

Top producers of wood in the rough, 2018-2021

World map of production of wood in the rough, 2018-2021

Latvia's production of wood in the rough has grown for the third year in a row. In 2021, Latvia produced 10 363 thousand tons, marking a 3.9% increase compared to 2020. From 2018 to 2021, production rose by 23.2%, with an average annual growth rate of 7.2%.

Annual dynamics of production in Latvia in kind, 2018-2021, K t

In value, 2018-2021, M $ US

Following a two-year decline, Latvia's production of wood in the rough has rebounded. In 2021, the output was valued at 918.6 million US dollars, up 19.8% year-over-year. Between 2018 and 2021, production increased by 5.5%, translating to an annualized growth rate of 1.8%. The lowest value was recorded in 2020 at 767.1 million US dollars, which also saw the largest decline of 8.8%.

Annual dynamics of production in Latvia in value, 2018-2021, M $ US

Exports wood in the rough from Latvia

Exports in kind, K t

After a two-year decrease, Latvia's exports of wood in the rough have risen. In 2021, exports totaled 2 556 thousand tons, showing a modest 5.6% increase from the previous year. From 2018 to 2021, exports fell by 25%, with an annualized decline rate of 9.1%. The lowest level was in 2020 at 2 421 thousand tons, which also experienced the largest drop of 19.2%.

Annual dynamics of product's exports from Latvia in kind, 2018-2021, K t

From 2018 to 2021, Sweden, Finland, and China were the primary markets for Latvia's wood in the rough exports in kind. Sweden accounted for 51.0% of exports, Finland for 17.2%, and China for 13.4%, together making up 81.6% of total export flows.

Structure of product's exports in kind by countries, 2018-2021

World map of product's exports from Latvia in kind, 2018-2021

Exports in value, M $ US

Following a two-year downturn, Latvia's wood in the rough exports have increased. In 2021, exports reached 226.6 million US dollars, a significant 21.7% rise over the past year. Between 2018 and 2021, exports decreased by 35.7%, with a compound annual growth rate of -13.7%. The lowest value was in 2020 at 186.1 million US dollars, which also saw the largest decline of 28.8%.

Annual dynamics of product's exports from Latvia in value, 2018-2021, M $ US

From 2018 to 2021, Sweden, China, and Finland were the main buyers of wood in the rough from Latvia in value terms. Sweden represented 43.5% of exports, China 19.0%, and Finland 13.8%, collectively comprising 76.3% of total export value.

Structure of product's exports in value by countries, 2018-2021

World map of product's exports from Latvia in value, 2018-2021

Imports wood in the rough to Latvia

Imports in kind, K t

Latvia's imports of wood in the rough have grown for the second consecutive year. In 2021, imports reached 1 439 thousand tons, a 4.7% increase from the previous year. From 2018 to 2021, imports rose by 12.3%, with an average annual growth rate of 3.9%. The lowest value was in 2019 at 1 117 thousand tons, which also saw the largest decline of 12.8%. The largest increase occurred in 2020, with a 23.1% rise.

Annual dynamics of product's imports to Latvia in kind, 2018-2021, K t

Throughout 2018 to 2021, Lithuania and Norway were the key sources for Latvia's wood in the rough imports in kind, while other markets played smaller individual roles.

Structure of product's imports in kind by countries, 2018-2021

World map of product's imports to Latvia in kind, 2018-2021

Imports in value, M $ US

Latvia's imports of wood in the rough have increased for the second year in a row. In 2021, imports amounted to 184.1 million US dollars, a sharp 63.6% increase compared to the previous year. From 2018 to 2021, imports grew by 33.6%, with an average annual growth rate of 10.1%. The lowest value was in 2019 at 108.4 million US dollars, which also experienced the largest decline of 21.3%.

Annual dynamics of product's imports to Latvia in value, 2018-2021, M $ US

From 2018 to 2021, Lithuania and Norway dominated Latvia's wood in the rough imports in value terms, jointly accounting for 83.6% of total flows, with the remainder distributed among smaller markets.

Structure of product's imports in value by countries, 2018-2021

World map of product's imports to Latvia in value, 2018-2021