VANCOUVER - Forest companies in British Columbia are seeing increased interest in their products from Asian countries that could soon be priced out of the Russian market thanks to a pending increase it its log export tax.

There is also hope the Russian tax, which will increase to 80 per cent from 25 per cent on Jan. 1, could help tighten supply and stop the downward spiral of lumber prices.

"It is going to be a positive, but it's going to be a secondary positive," said James Shepard, the president and chief executive of Canfor Corp. (TSX:CFP), Canada's biggest softwood lumber producer.

"My reading on it is, it isn't going to mean we are going to get a bull market on lumber, but it will give it a real solidity to the bottom."

Lumber prices have dropped dramatically in recent years as a result of the U.S. housing collapse, which in turn has hammered profits at Canadian companies that ship about 80 per cent of their products to the United States.

A report released last week by the International Wood Markets Group said Russia's increased log export tax, which has already led to mill closures in Finland and the Baltics, will create a huge supply gap for China, a major importer of Russian logs.

The report suggested Canadian forestry firms could benefit from "dramatic shortages and soaring raw material prices" as countries such as China search the world for alternative supplies of competitively priced logs, lumber, pulp and other wood products.

TimberWest Forest Corp (TSX:TWF.UN) said it has already seen increased interest in its logs in anticipation of the tax increase.

"They are looking at and inquiring about availability of product and supply because they are aware this tax is in front of them ... . Supply from Russia will either be unavailable or more expensive," said TimberWest spokesman Steve Lorimer.

There is some skepticism in the industry that the tax increase will go ahead given the global financial crisis and the thousands of jobs that are expected to be lost in Russia as a result of the tax.

"Until we see it come into place we aren't popping the champagne corks," said Coast Forest Products Association president Rick Jeffery.

Shipments to China from coastal B.C. have already increased to 14 per cent from six per cent over the past three years, Jeffery said.

If the Russian tax increase goes ahead, he expects demand to grow further, but the competition will be stiff from other countries such as the U.S. and New Zealand.

"It's going to be a hard slog," said Jeffery.