Strong demand for logs raises income

The total value of forestry exports for the year to 31 March 2011 was NZ$4.4 billion, NZ$0.8 billion up on the previous year, due to the sustained high levels of log exports over the year.

The Ministry of Agriculture and Forestry has today released forestry production and trade figures for the March 2011 quarter.

The statistics show that New Zealand’s log exports continue to be dominated by exports to China, says Andrew Doube, MAF’s Acting Manager of Sector Infrastructure.

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

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

Overall, the export of 3.1 million cubic metres of logs in the quarter accounted for half the estimated harvest. “This is the first time this has happened in the 25 years these statistics have been collected,” says Andrew.

The strong international demand for logs has also resulted in higher domestic prices, putting pressure on New Zealand wood processors, who are also facing less demand from reduced construction activity here and in the United States due to the global economic recession.

“As a result, some mills have closed or down-scaled since the December 2010 quarter, and some remaining sawmillers have reported to MAF that they are questioning their future viability in the industry.”

The earthquake that struck Christchurch in late February 2011 had no immediate effect on total sawn timber production figures through the first quarter of the year.

“There is a general expectation that there will be increased demand for processed wood products once the post-quake rebuild begins.”

The forestry production and trade statistical release provides a comprehensive review of forestry activity on a quarterly basis.

For further information, see the full March 2011 quarter report at:

Forestry Production and Trade Publications.aspx

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