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Forestry logs $4.4b with help from Asia

Forestry logs $4.4b with help from Asia
There's money to be made in trees, with forestry exports for the year up a respectable $0.8 billion to $4.4 billion in total.

Forestry exports were worth $4.4b last year[Photo credit]

So money doesn't grow on trees. There is, however, healthy profit to be made in the forestry biz; sustained high levels of log exports lifted the total value of forestry exports to $NZ4.4 billion for the year to 31 March 2011, up $0.8 billion on the previous year.

Today the Ministry of Agriculture and Forestry released forestry production and trade figures for the March 2011 quarter, and stats show our log exports continue to be dominated by China, according to MAF acting manager of sector infrastructure Andrew Doube.

The increase is driven by China’s strong economic growth and a reduced availability of logs from Russia, their traditional supplier. China imported 1.7 million cubic metres of New Zealand logs in the March quarter, up 44.5 percent on the same time the previous year.

India is also emerging as a significant export destination for our logs, with its demand approaching that of Korea, our second-largest log export market. The volume exported to India in the March 2011 quarter was 0.4 million cubic metres, up by a hefty 157 percent on the same time the previous year.

For the first time in the 25 years the statistics have been collected, the March quarter’s log exports (which totalled 3.1 million cubic metres) accounted for half the estimated harvest, says Doube.

Strong international demand has forced domestic prices to rise, which has put pressure on New Zealand wood processors who also face reduced demand from a decrease in domestic construction activity due to the recession.

As a result, some mills have closed or downscaled their operations since the December 2010 quarter. Some remaining sawmills have reported to MAF that they are questioning their future viability in the industry.

While the Christchurch earthquake does not appear to have had any immediate adverse effect on production figures, there is a general expectation in the industry that demand for processed wood products will increase once the post-quake rebuild begins.