Increased demand for New Zealand logs coming from China leads the foresters to take advantage of the\u00a0strong log prices. Apparently, the soil dried out and foresters may now get machinery on to land.<\/p>\n
\"China is the driver for these strong selling prices. And leading to that are good prices in China for New Zealand logs, good shipping rates and a lower exchange rate,\"\u00a0Canterbury forestry consultant Allan Laurie\u00a0said.<\/p>\n
Laurie added that\u00a0a key indicator was the\u00a0price for A-grade logs, which were 30 centimetres\u00a0or\u00a0more\u00a0at the small end.\u00a0\"The price for them is\u00a0currently\u00a0US$140 an export cubic metre. That's a good price\u00a0and it is then\u00a0translated to New Zealand dollars\u00a0on an 'at wharf gate' basis,\" he explained, adding that domestic consumption was also very strong.<\/p>\n
Stuff.co reported that about 85%\u00a0of the\u00a0logs\u00a0volume harvested in New Zealand\u00a0plantation forests\u00a0were radiata pine.<\/p>\n
\"While the main centres of\u00a0Auckland\u00a0and Christchurch are off an apparent boil in terms of new house starts, other second tier cities are\u00a0experiencing\u00a0significant increases,\" said Laurie, adding that\u00a0pine\u00a0set the price for douglas fir,\u00a0while\u00a0other species harvested included cypress\u00a0and eucalyptus. Also, the\u00a0demand from India, which is now only 1.7 million cubic metres a year, was expected to grow to about three million cubic metres by 2020.<\/p>\n
China's demand has reached 800,000 cubic metres each month and log supplies to China from New Zealand, Australia,\u00a0the Pacific Northwest and Russia had been in step with consumption and that had resulted\u00a0in a\u00a0stable inventory.<\/p>\n
The Chinese\u00a0gross domestic product grew by 6.9 per cer cent\u00a0for the second quarter, while the\u00a0domestic prices for timber in China\u00a0had made a turnaround\u00a0and New Zealand log supply was dominant for softwood, mainly pine. This is what drives the high log prices in New Zealand.<\/p>\n
Also, because of India's major economic reforms, along with the GST at 18%, the market has subdued. But India sees New Zealand as an important supplier for the future.<\/p>\n
As Stuff.co reported, the local and Chinese export demand was helping\u00a0New Zealand's\u00a0larger forest owners\u00a0and farm foresters take\u00a0advantage of the good log prices to\u00a0harvest\u00a0what they could. Labour shortages, port congestion and persistent rain in winter and early spring had raised\u00a0doubts that log production would\u00a0ramp up.<\/p>","protected":false},"excerpt":{"rendered":"
Increased demand for New Zealand logs coming from China leads the foresters to take advantage of the\u00a0strong log prices. Apparently, the soil dried out and foresters may now get machinery on to land. “China is the driver for these strong … Continue reading