Russia is the world's largest exporter of softwood and hardwood logs.  Their largest customers for those logs are China, Japan and Finland.  That's right, most of that wood flooring from China is really made from Russian logs, but that is about to change.

Concerned that their natural resources were being depleted so quickly that they might not be able to keep up with their own domestic needs, Russia recently implemented a 25% Export Tax on all logs leaving Russia.  A pretty big number but that tax will rise to 80% on January 1, 2009, less than 5 months from now.

How will this impact the USA and the wood flooring industry?  By removing the largest exporter of wood from the market, the global supply of logs will shrink by 50 million cubic meters.  A shrinking supply means higher raw material costs for those importing logs to make furniture, flooring and plywood.  Just when you thought wood flooring prices were stabilizing, they are probably go higher.

The converse is good news for the timber industry since it will make their standing inventory worth more.  Species like red oak that are indigenous to North America will be more price competitive than ever.

Just one more example of how we are all living in a new global market.