20 October 2012

Total quarterly roundwood removals reached a record high of 7.4 m cubic metres in the June 2012 quarter. This was a 7.0% increase on the previous high recorded a year ago, according to figures released by the Ministry for Primary Industries.

Unfortunately, the value of forest product exports declined 5.7% to $1,131 million compared with the same quarter 12 months ago, a reflection of the impact of lower prices exceeding the impact of increased export volumes.

Bucking the downward trend was sawn timber, where export revenue increased on the back of a 24.4% jump in export volume. This jump was distinguished by a large volume shipped to Western Samoa. Increases were also recorded for exports to China, Korea and Saudi Arabia.

The increased harvest was due to favourable autumn weather and the recovery of wind-thrown logs from summer storms in the North Island. As a result there was a strong lift in export log volumes, to a record 3.8 million cu m, which accounted for more than 50% of the total roundwood removals for the quarter.

Despite the lift in volumes, lower export revenue was recorded for logs and poles (down 11.6%) and pulp (down 5.5%).  

Prices for New Zealand logs in Asian markets peaked at very high levels in the March and June 2011 quarters, before declining an average of 24% through the following year. New Zealand log prices have since shown resilience at current levels.  However, the presence of wind-thrown logs in the export mix is likely to have reduced the overall value of log exports for the quarter.

Lower pulp prices have brought about production cutbacks globally, while expanded global supply of wood fibre has caused stocks to accumulate. This combination has resulted in reduced demand for wood chips in offshore markets.

Source: MPI. For more information go to the full report in the Publications section (under the News and Resources menu) of the MPI website.