Export Taxes Push Domestic Prices Higher as Pulp and Paper Sector Faces Shifts
The introduction of export taxes in the fall triggered a rise in domestic prices for several paper products. Prices for some cardboard varieties increased by nearly 15 percent within a week of the tax taking effect, a change observed by industry watchers and reported by market outlets. The immediate impact was felt across the supply chain, with manufacturers adjusting contracts and distributors recalibrating inventory planning to accommodate the new cost structure.
Analysts anticipate that price adjustments may persist through the remainder of the year. By early next year, some expect a broader shift in market dynamics as new capacity enters operation and policy responses evolve. A large new pulp and cardboard facility with a capacity of around 600 thousand tonnes is slated to commence operations in Ust-Ilimsk. While initial projections favored exports to major markets such as China, the current fiscal environment increases the likelihood that a substantial portion of production will stay within Russia. This potential shift could influence supply levels and exert downward pressure on prices if domestic demand remains robust and import competition is constrained.
Officials have noted that export duties in their current form are reducing the marginal income of exporters, a consequence linked to currency devaluation and the evolving trade balance. The ruble’s movements over the year have added complexity to these calculations, with some sectors experiencing a stabilizing effect as costs and pricing realign with global market conditions.
Historically, Russia’s pulp and paper industry advanced through a strong emphasis on exports. Sanctions and logistical challenges have nonetheless weighed on manufacturers, especially in the European portions of the country. Yet a weakening ruble earlier in the year helped offset some of these headwinds, supporting competitiveness in certain segments. The current policy environment, however, continues to shape the export landscape, prompting industry stakeholders to explore strategies that maintain a healthy domestic market while preserving export potential.
Manufacturers are urging the government to target export duties more precisely. Their view is that duties should apply to products that are scarce on the domestic market — cardboard boxes and related packaging components — rather than broad, across-the-board measures. The goal is to prevent a shortfall in domestic supply while preserving incentives for productive investment in the sector. Efforts to balance export revenue with domestic market stability remain central to policy discussions as the sector adapts to shifting trade rules and macroeconomic conditions.
In mid-October, the stance toward export restrictions remained nuanced. The authorities signaled that some limitations would stay in place, particularly with regard to energy-related exports such as diesel fuel. These controls reflect broader attempts to manage scarce resources and maintain domestic supply chains under changing external pressures. Concurrently, transport challenges across regional corridors continued to influence cost structures, with ongoing restrictions on the movement of certain wood products through adjacent transit routes shaping the cost and timing of shipments.