Timber production in Germany is expensive, but the domestic wood and paper industry has to sell its products at world market prices. We analyze the importance of raw material costs in the cost structure of German companies. For this, we combine large data sets from different sources. On this basis, we want to assess how increasing wood scarcity influences commodity prices in the wood and paper industry. Furthermore, we want to know how and to which extent different branches in the wood and paper industry handle increasing raw material costs:
• Are they able to pass the increasing costs on to consumers?
• Are they able to block the increasing raw material costs, so that only forest owners have to bear them?
• Are they able to compensate the increasing costs through technological change?
Only if the German companies are able to implement at least one of these options they can survive on the world market and provide income and employment in Germany.