Modernisation of trade in round timber promotes a more transparent and competitive Lithuanian timber market

For nearly half a year now, wholesale trade of round timber produced in state forests has been carried out via the Round Timber Electronic Trading System (AMEPS). The first operations were started via the AMEPS in June of this year, when the first electronic auction for long-term (ten years) and short-term (half a year) contracts for the purchase and sale of timber was launched. At that time, 520 buyers bought timber from all 42 forest districts of the country for nearly LTL 170 million. Auctions of this type for the purchase of round timber are to be held every half a year, which means that the next auction will take place very soon—in December of this year.

Auctions involving short-term contracts for the purchase of timber take place on a daily basis. This year, approximately 800 auctions of this type have been held via the AMEPS. When submitting their electronic applications, the buyers do not know their competitors, which means that there is virtually no chance of any unlawful agreements or price reductions. Furthermore, every auction participant can see who has won and why.

‘The purchase of timber is now simpler and more transparent’, Juozupas Zimnickas, head of the Wood Processors’ Association, said in praise of the AMEPS. According to Mr Zimnickas, that several hundred buyers participate in Lithuanian round timber auctions is perfect evidence that market laws operate in the country, and all wood companies of all sizes can compete in equal conditions. It should be mentioned, however, that this procedure when the interests of not only large but also of medium-sized and small entrepreneurs are considered is not welcomed by some of Lithuania’s large wood processing companies. The AMEPS has been criticised by the latter.

It can be stated that the procedure for the purchase of timber from the state sector is improving and creating a real competitive environment in the Lithuanian timber sector, which ensures maximum benefits for the state both in the long and short run.

Based on an article by Pranas Satkus, Lietuvos Žinios, 9 November 2012.