PRICES OF WOOD INCREASED ARTIFICIALLY

    BAKU/13.09.10/TURAN: The prices of wood and timber have increased in Azerbaijan considerably in the past 30 days, though the exporters have not raised them.
     The price of raw wood increased 22% in early August. The prices are however relatively stable after the recent splash. Wooden bars are sold at AZN 270 per m3 in Baku and more expensively in the regions (at least at AZN 290).
     Retail points complain that wood is offered to them at $435 (AZN 276). `We try to reduce the price due to the commodity purchased before in order not to lose our customers,` the Darnagul retailers say.
     Azerbaijan imports timber and wood from Russia. The summer fires in Russia caused the consumer prices to increase 2-4%. E.g., the prices of slice wood increased 4.1% on average against July 2009. The prices of building materials in Russia increased 0.7% against July.
     However, an expert in the market told Turan on the anonymity condition the prices partly increased because of the import decreasing against the demand and the artificial increase in the customs duties. He said the customs take $5,000 for the `registration` of a railway car of wood (approximately 85 m3) (they took $3,000 before). The state budget only receives a small part of this. The unclear customs settlement schemes increase corruption even more.
     The wood market"s monopolization is less than in most of the other markets. However, officials control the market, including the importation. The commodity"s distribution to retail shops is concentrated at one group. The customers are often deceived and buy wood of improper peculiarities. They are not given cash checks either. They also have to pay the workers for the transportation themselves.
     Wood is sold at RUR 5,500 ($178) per m3 in Russia. The customs duty for imported wood is $10 per m3 in Azerbaijan. An 18% VAT is also added. Importers say they have to pay $350-400 per m3 for having a railway car of wood brought from Yalama to Baku and unloaded here. That is why wood is sold twice as expensive as in Russia.
     The prices of private houses have reportedly increased because of the expensiveness of wood.
     Experts believe wood will become 5-10% cheaper in Azerbaijan soon, because the demand usually decreases in autumn. -08A--