WASHINGTON: Log exports have recovered strongly following the improved demand over the past year from China, New Zealand’s largest market for logs and sawn timber. The recovery follows a slump caused by excessive inventory in 2015. The healthier China market was reflected in Port of Tauranga’s interim first half results announced this week, which showed log exports from Tauranga had rebounded from the previous corresponding period, increasing 21 per cent in volume to nearly 3 million tonnes.
Tauranga is New Zealand’s major log export port, accounting for around one-third of total exports. According to Ministry of Primary Industry data, New Zealand log exports by value increased in the 2016 year by $568 million to a total of $2.5 billion, a jump of 29 per cent on 2015. China accounted for 77 per cent of this increase, with an additional $440m worth of export log sales. South Korea and India accounted for an additional 10 per cent and 7per cent respectively.
Prices paid by log exporters for logs at ports around New Zealand increased sharply in January with a slight reduction in February, Rotorua-based forestry consultant PF Olsen said in its latest report. “Export markets are expected to remain steady for the next few months with any price changes for logs at New Zealand ports a reflection of shipping and exchange rate fluctuations,” says PF Olsen business development manager Scott Downs. PF Olsen noted that inventory at the China ports had risen sharply from the reported 2.2 million cubic m in December 2016 to a current estimated 3.5-4.0m cubic m. But the report attributed the buildup to the Chinese New Year as factories across China closed down in late January, and said it was not a major concern. While market observers were keeping a watching brief on the increase in inventory, they do not hold major concerns for the state of the market, said Mr Downs.
