Forests of Ukraine Increases Timber Supply as Domestic Surplus Grows

Ukraine's state-owned forest manager is sharply increasing timber supply even as demand weakens, deepening oversupply in the domestic market and pushing warehouse stockpiles above 1.17 million cubic metres. Forests of Ukraine has been re-listing unsold lots at reduced prices since March in an effort to clear inventories, but the imbalance remains pronounced: around 55,000 cubic metres of timber are being offered daily against industry consumption of about 40,000 cubic metres.

The pressure comes as the company expands harvesting despite wartime constraints and lost access to parts of the country's forest base. Over the first four months of 2026, harvesting exceeded the same period last year by 632,000 cubic metres, even though operations remain disrupted in Luhansk, Donetsk, most of Kharkiv and significant parts of Sumy and Chernihiv regions. The company says output now surpasses pre-war levels of state forestry enterprises. A significant portion of the stockpile increase comes from pine roundwood alone, with inventories of that segment up by 273,000 cubic metres — underscoring both the scale of the surplus and the difficulty of moving core softwood volumes through the domestic market.

Processors are struggling to absorb the additional supply. Ukrainian wood manufacturers face delays in raw material shipments and weaker operating conditions caused by power outages, rising logistics costs, labour shortages and soft demand in the European Union. The glut is being amplified by broader weakness in the European wood market, where imports have been falling amid tariffs, the implementation of the EUDR and a sluggish construction sector — limiting export outlets for Ukrainian timber and adding further pressure on domestic inventories.

Despite dissatisfaction from some large producers with foreign beneficiaries, Forests of Ukraine says it will maintain its domestic-priority policy, continuing to give precedence to firewood supplies for households, the social sector and the Armed Forces of Ukraine over commercial export volumes.

The company is preparing to increase market pressure further: its third-quarter 2026 supply offer will exceed last year's level by 300,000 cubic metres. Starting auction prices will remain broadly unchanged from the previous quarter after consultations with industry, with only inflation-based adjustments. The company is also considering changes to its sales strategy, including greater differentiation of lots by log diameter and a reduced share of products sold through semi-annual auctions in response to market volatility.

The central question for the months ahead is whether domestic processors or European buyers can absorb the additional Ukrainian volumes, as the regional timber market continues to adjust to the post-2022 removal of Russian and Belarusian product from European supply chains.