Finland may compensate paper firms for tariffs rise

HELSINKI, June 26 (Reuters) - Finland will review possible compensation to paper makers for high wood tariffs proposed by Russia, Foreign Trade Minister Paavo Vayrynen said on Thursday. Russia, a key wood source for Finnish paper producers, increased wood export duties from April to 15 euros per cubic metre from 10 euros, in a series of planned increases, and plans to raise them to 50 euros from the beginning of 2009.

Finland has taken more than 10 million cubic metres of timber a year from Russia.

Finnish paper and pulp makers, including Stora Enso STERV.HE and UPM-Kymmene UPM1V.HE, have said they are being forced to close plants as the rising wood costs are hurting their already low profits.

Reporting by Tarmo Virki, Writing by Agnieszka Flak; editing by David Stamp