The supply and demand conditions, determining the actual roundwood removals, have undergone deep changes in the region. On the supply side, the allowable cut is increasing in almost all the countries studied, even considering recreational and conservation functions of forests. The emergence of a large number of small forest owners will, however, create complications in the wood market in the form of unpredictable pricing and selling behaviour. Unclear ownership relations and a prolonged restitution process may also freeze wood sales for some time.
On the demand side the domestic use of industrial wood is diminishing following the decline of the forest industries. This decline is partly of cyclical character, a consequence of demand slump. There are also long-term structural changes due to significant obsolete forest industry capacity which will vanish as non-competitive. This process has started e.g. in the pulp and paper industry of the region.
Low profitability and foreign competition will be constant threats to the forest industries of the region also in the long run. Further decline can be reversed by adroit industry and company level strategies. This may succeed in some countries but not in the whole region, which means diminishing demand for industrial wood in the medium, possibly even in the long term. Fuelwood consumption will not change much. As the annual allowable cut is constantly increasing growing amounts of wood will be available for exports in the short and medium run.
