When I wrote the last article about problems on oak market, I did not expect in my wildest imagination that the war could start in the middle of Europe in the middle of 21. century. And that is exactly what happened.
I cannot describe how sorry I am watching the poor people leaving their homes and I sincerely hope this terrible war will end really soon.
However this war situation pushed the oak crisis to another level. Ukraine used to be one of the biggest exporters of oak timber, planks, elements and semi-products in Europe. All business stopped over the night. Many big companies stayed without raw material instantly. It is true, that it takes time for oak to dry, but it only means that in a few months these companies will have empty stocks.
Most of Italian companies, which produce kitchen fronts get over 80% of their oak raw material from Ukraine.
I know several German and Austrian companies that buy over 60% of their solid and fingerjointed panels in Ukraine.
Danish furniture productions buy a lot of oak elements in Baltic countries. Majority of this oak actually comes from Ukraine, it is only dried and processed in Baltic countries.
All biggest Polish and Czech solid and fingerjointed panel productions buy most of their oak in Ukraine.
Representatives of all above mentioned companies are aware, that even if the war stops now, it will take years to re-establish the business as it was only a month ago.
So all these representatives and many more are now desperately seeking for new sources. And which is the biggest source for high quality oak? Obviously – the former Yugoslavian countries.
If you read any of my latest articles, you know, that there is a huge lack of oak (and also other hardwood) in our region. Chinese buyers are still buying everything they can get, demand from local producers is increasing, too. Now also the rest of Europe will try to buy raw material in former Yugoslavia.
There can be only one result – the prices will get even higher. However higher prices will not bring more quantities of oak on the market. The opposite will happen. Forest owners speculate and cut less timber. Reduced cutting means even less available material on the market as it is at the moment. In a way we are chasing our own tail, but we are also pumping a big bubble of oak prices.
The question that pops out lately by every debate that I have with my friends and business partners is – where will this end and what are the possible scenarios. Here are some points of view:
- The war stops fast and export restarts again
It is true, that the war can stop fast, but the damage is done. It will take months if not years before Ukraine recovers and starts its production again. We can all feel the consequences of corona lockdowns even after two years. Honestly a war is a much bigger deal, especially on the top of all supplying problems of different products in the last period.
- Oak becomes too expensive and people stop buying it
This can happen and in a certain scale it will happen. If we look at historical price movement of oak material anyone can see that oak prices did not raise significantly in the past twenty years. Maybe it is time to put oak back on the pedestal as it was many years ago and accept the fact that not everybody can afford to have solid oak furniture or solid oak staircase.
It is funny how Norweggians went from their traditional pine staircases directly to solid oak staircases. I don’t want to underestimate pine, however it is not comparable with oak.
My opinion is that oak will become a material for the rich.
- Recession which will cause drastic fall of oak prices
This can be a nightmare for us, who buy oak and keep it on stock for several months or even years. Many indicators show that recession in inevitable. Even stagflation can appear first time in almost 50 years.
What does it mean for oak prices? I expect a possible short fall in prices, which cannot be drastic, because the quantity of oak is diminishing and I simply cannot imagine that there will ever be again a surplus of oak on the market.
- People will start to buy other wood species
It is possible, but realistically – which species can replace oak? We all know that exotic wood is used less and less due to environmental issues and deglobalization. Beech has always been in another price level and customers are used that oak is much more prestigious that beech.
The demand is growing on ash. However if we consider the total quantity of ash in the forests and the sad fact that ash is due to illness an endangered species, we can see that ash is not a realistic replacement for oak wood.
Species like walnut, cherry, maple or acacia can never replace oak, because there is simply not enough quantity of all species together to become a serious contender for oak throne.
We are in a situation which is a total enigma for everybody. Two years of pandemia destroyed supplying chains, deglobalization is a fact and now the war in the heart of Europe emerged. There are so many variables in this equation, that we simply cannot calculate the result.
For example – do you know that the quantity of cut oak in Serbia depends also on the season of raspberries. Serbia is known as one of the biggest exporters of raspberries in the world. If the season is good, then most of owners of private forests are busy picking up this small and tasty fruit, so they reduce cutting their forests. Yes, this is another variable in equation, how much oak we will be able to get this year.
But first and most important – stop the war now.
