Sharechat Logo

NZ softwood log exports hit new record in 2017, raising ire of wood processors

Thursday 11th January 2018

Text too small?

New Zealand log exports hit a new record last year, underscoring the concerns of local manufacturers that the country is sending too many unprocessed logs overseas, posing a threat for local timber supply in the future and undermining the goal to add more value to exports.

The country exported $2.41 billion of softwood logs in the first 11 months of last year, surpassing all previous records for any full calendar year, according to the latest Statistics New Zealand figures. Data for the full year will be released on Jan. 30.

New Zealand is experiencing strong demand for logs from China, which has clamped down on harvesting its own forests and reduced tariffs on imported logs to meet demand in its local market. In the first 11 months of 2017, New Zealand exported $1.81 billion of logs to China, above the level for any full calendar year and accounting for 75 percent of softwood exports.

Increased shipments of raw logs goes against the aim of successive governments to add more value to commodities and riles the wood processing sector, which says more manufacturing needs to be done at home to sustain the local industry. It says an uptick in demand for wooden housing could see supply having to be met from overseas if the current situation prevails.

Prior to the election, the wood industry, representing New Zealand’s third-largest export commodity group, was annoyed at the lack of attention it received from the Ministry for Primary Industries which it felt was more focused on food safety, agriculture, horticulture and biosecurity of the border. Forestry, it was felt, was at the bottom of the MPI pile and fronted by junior ministers and officials.

The industry starts this year in a more upbeat mood with the new coalition government’s commitment to re-establish the Forest Service, plant more trees, focus on regional economic development, require greater scrutiny of overseas investment in forestry, and improve the Emissions Trading Scheme for forestry amid industry concerns that foresters couldn’t compete with rival land users such as dairy farmers under the current system.

“We are certainly on the radar now with the government very much pushing in the right direction. The whole industry has a much higher profile now,” said Jon Tanner, chief executive of the Wood Processors & Manufacturers Association of New Zealand. “Forestry worldwide has to have the hand of government.”

While government initiatives gave the industry more optimism about the long-term future, Tanner said uncertainty remained around the shorter term issue for the domestic market of more unprocessed logs heading overseas.

“We are still very concerned about the competition in the market right now and where that is going and how that is going to be regulated and tackled,” he said. “We have got a major problem in the set up of the market. We have got a lot of logs being exported, and it’s being increased.

“The demand out of China, all the pundits are saying, it’s just only going to increase.”

Other wood exporting countries such as Canada and Russia support their local industries while Chinese wood manufacturers benefit from subsidies, creating an uneven playing field for New Zealand processors, according to the WPMA which would like to see the government take a complaint to the World Trade Organisation.

Tanner said the WPMA was contacted by its counterparts in Australia late last year who were starting to experience a similar problem of increasing log exports to China.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares hit record amidst rebalancing, Comvita and Sky TV gain while Pushpay, A2 drop
NZ dollar heads for 0.5% weekly decline as risk aversion rises
RBNZ's Spencer tipped to stand pat in final review next week, repeat same message
Lyttelton Port rejects union claims as strike planned for next week
Storm CEO Deborah Caldwell buys women's clothing chain from Hallenstein
Govt to invest $5 mln in Northland wharves through regional fund
Veritas shareholders vote in favour of Mad Butcher sale
Failed fashion chain Andrea Moore & Co 'significantly overstated' value of inventory by $3.3M
UPDATE: NZ dairy manufacturer plans to list on ASX to raise up to A$20M for expansion
Bay of Islands Airport terminal upgrade to get $1.7M from govt's provincial growth fund

IRG See IRG research reports