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The Russian/Ukraine conflict’s effect in Australia

There is no moral equivalence between trade and the rights of sovereign nations, or of human rights for that matter. Trade is a tool for meeting human needs and advancing the interests of countries. Source: IndustryEdge

Inevitably, trade with Russia and the Ukraine is a relevant topic right now. It could be argued that like travel itself, trade brings nations closer together, increasing understanding and interdependency. One country relies on another for goods, which in turn relies on the other for income.

In that context – rightly – the prospect must be very strong that much (but not all) of the world will shortly ban all trade with Russia.

While we might all welcome bans on Russian trade in response to their outrageous invasion of Ukraine, we should understand what that might mean for Australia and its trade in wood products.

This is a short analysis, focussed on imports.

IndustryEdge will expand on this and repeat the information for our paper sector clients in coming days. There is more to add, including related to the strategic importance of Ukraine and the Crimean Peninsula from a trade and logistics perspective.

Imports from Russia dwarf those from Ukraine

In 2021, Australia imported wood products from Russia valued at AUD80.0 million and from the Ukraine, just AUD2.6 million. Much like Russia’s appalling military dominance, its imports to Australia are valued at about 30 times more than from the Ukraine.

Wood Product Imports from Russia & Ukraine: 2021 (AUD)

The pattern of wood products imported from Russia has changed over recent years – especially in 2021. Imports more than doubled from 2020, driven by what here is described as ‘Other’. Close examination shows most of this was Builders Wooden Posts & Beams – essentially structural elements of housing construction. No surprise in the massive boom in housing experienced over the last almost two years.

Australian Imports of Wood Products from Russia: 2017 – 2021 (AUD)

Miniscule though they are, Australia’s wood product imports from the Ukraine are mainly of plywood and some other wood panels. They too have exploded over recent years, and in context, we might hope that in future they will continue to grow.

Australian Imports of Wood Products from Ukraine: 2017 – 2021 (AUD)

What impact would trade bans have?

In 2021, Australia’s imports of wood products were valued at AUD2.726 billion. Russia accounted for 2.9%, the Ukraine for just 0.1%. Likely bans on importation of Russian wood products would be manageable for Australia, albeit not negligible.

For Russia, extensive bans would be more challenging, especially over longer periods. Longer term inability to trade could become deeply problematic for the nation as a whole, including its rulers.

If the likely bans extended to Russian satellite nations, that could be more challenging for Australia and its wood products supply, but even more so for Russia and that would be the point.

For more from IndustryEdge click here.