Why isn't India Importing Russian Timber?

Logs and soft-wood sawn timber, is one of Russia's prime exports. During Jan-Aug 2017 Russia exported 12.156 million tonnes of sawn timber worth $2.58 billion, with China being their biggest buyer. India's share is below 2 % because except for a couple of South Indian companies, virtually nobody regularly imports from Russia. In fact India's share of import is less then 2 %.

Even today with timber prices spiraling up worldwise, where US exports are on average above 300 USD, CIF Mundra for 2 grade SYP, Indian importers are still failing to source from Russia which is considerably cheaper.

There are several unconnected reasons for the this lack of trade which have collectively been responsible for this state of affairs.

One of main reason is that most of the larger Russian Timber companies prefer to entertain only large buyers with long supply and rate contracts. While most Indian buyers prefer to do spot purchases of small quantities, of one or two containers at a time.

Indian buyers are also known for demanding non-standard sizes and lengths but are not ready to paying extra for the additional work. Likewise, most Russian sawmills don't work without an advance which many Indian buyers feel insecure about giving. Another major stumbling block is that most Russian companies in the Timber trade prefer to work with direct transfer of funds instead of LCs.

Wrangling for price and payment terms starts soon after, when they promise to order 100 containers a month to bring the price down, but would first want to conclude a deal for 2-5 containers; as samples. Next they state that they would personally supervise the loading. A demand made as much by a nagging distrust as in order to get into direct contact with the mill in order to bypass the agent or the middleman in the future.

Asked whether German or the US sawmills allow such liberties, they would muttered something about guaranteed quality, though everyone knows the answer.

Incidentally, the same Indian buyers docilely purchase whatever is sold by the German and the North American Timber companies, at their set prices which are usually higher than the Russian ones.

Not surprisingly, as unflattering as it sounds many Russian mills simply don't have the patience or the will to entertain Indian buyers, who fuss about quality, demand non-standard sizes and lengths, but also want very low volumes at impossibly low prices.

Here I have to agree with the Russians because even from my own experience, I have found that a typical medium sized Indian timber importer initially claims interest only in the best material, but quickly settles for the cheapest grades. Next they would ask the prices of cut and waste pieces, instantaneously diminishing their stature from that of a potential large client into a scrap purchaser.

But considering the global upward trend of softwood prices and the price advantage that Russia today offers its is the Indian importer who is at a loss.