Toppinen, A., Vitanen, J., Leskinen, P. and Toivonen, R. 2005. Dynamics of Roundwood Prices in Estonia, Finland and Lithuania. Baltic Forestry, 11 (1): 88-96

This study analyses the development of Estonian, Finnish and Lithuanian roundwood markets using nominal monthly time series of delivery prices of pine, spruce and birch sawlogs and pulpwood from the time period of January 1996 – July 2004. The question whether any long run relationships between the wood assortment and species prices in the three countries exist is studied using the Johansen’s co-integration method. The Estonian and Lithuanian roundwood prices have approached the Finnish price levels, but long run equilibrium relation-ships were only found between spruce sawlogs in Estonia and Lithuania, and in Finland and Lithuania. These results indicate that the roundwood markets in the Baltic Sea Area are not yet integrated with the exception of spruce sawlogs. Thus, the regional roundwood supply and demand characteristics still play an important role in these countries.

Key words: Baltic Sea Area, roundwood markets, cointegration analysis, long run economic relationships.