Log exports are forecast to reach US$3.6 billion in the year ending June 2021, led by demand from China raising prices and incentivising harvesting. This is an increase of 25.5 percent compared to the previous year following four consecutive quarters of growth. This strong demand has pushed log export prices near the record levels observed in 2018-19.<\/p>\n
Chinese demand for logs remains strong<\/strong>, driven by increased construction activity and further supported by supply constraints such as the ban on Australian logs, and a reduction in global shipping capacity (although log shipping from New Zealand appears to have remained relatively unscathed). New Zealand remains the largest supplier of softwood logs to China followed by Germany, Russia, the US, Uruguay, and the Czech Republic. China\u2019s log imports from most countries have been growing, including New Zealand, and accounted for 83.3 percent of New Zealand\u2019s total volume of log exports in the year ended March 2021.<\/p>\n Log export revenue is forecast to reach US$3.8 billion in the year ending June 2022, on the back of continued strong demand as China ramps up infrastructure projects. The outlook for log prices is expected to decline slightly due to increased supply from other countries. European and South American foresters anticipate increased log shipments to China, which is likely to put downward pressure on New Zealand log prices. It\u2019s not clear whether Russia's proposed log export ban in early 2022 will be a complete or phased-in ban, but nevertheless, the ban is expected to partly offset the impact of increased supply into China and support New Zealand log demand and prices in the medium-term.<\/p>\n South Korea is New Zealand's second largest log export market<\/strong>\u00a0and accounts for 8.0 percent of total log exports. Demand for logs slowed over the past few years as economic growth has weakened. In addition, importers are forced to compete on price with Chinese importers, so while volumes have decreased, the value of exports has remained relatively steady, as rising Chinese demand has lifted prices. Export volumes to South Korea are expected to remain low as Australian logs are being rerouted following China\u2019s ban on them, placing further downward pressure on demand for New Zealand logs.<\/p>\n India\u2019s demand for New Zealand logs plunged<\/strong>\u00a0due to the COVID-19 pandemic and is yet to rebound. Export volumes are down 69.5 percent in the year ended March 2021 compared to last year. India now accounts for only 2.0 percent of total log exports. Demand from India is expected to remain subdued for the rest of the calendar year, as COVID-19 cases remain high. In addition, Australian logs have been redirected to India after China banned them, putting pressure on this market. Over the medium-term, demand from India is expected to increase as the pandemic wanes and conditions improve.<\/p>","protected":false},"excerpt":{"rendered":" Log exports are forecast to reach US$3.6 billion in the year ending June 2021, led by demand from China raising prices and incentivising harvesting. This is an increase of 25.5 percent compared to the previous year following four consecutive quarters … Continue reading