Forest Growers Levy Trust adjusts to changing market

THE NEW ZEALAND FOREST GROWERS LEVY Trust (FGLT) anticipates borrowing and using reserves to maintain as much of its yearly work programme as possible.

The Trust will reduce its work programme by a million dollars, following disruption to forest exports and production caused by the international spread of Coronavirus.

FGLT Chair, Geoff Thompson, says it’s anticipating covering an even larger fall in its revenue and is planning on using reserves and borrowing so as not to significantly disrupt its funding of industry good activities.

The FGLT previously budgeted to spend $8.5 million in 2020, mostly in forest research, but also other projects, such as health and safety and biosecurity. Income for the FGLT is from a levy on harvested logs, set currently at 27 cents per tonne.

Mr Thompson says the outlook for forestry over the short term is highly volatile: “The current market in China for log exports appears healthy, but we know other countries have sought to fill the gap in China which New Zealand has left while we have been in lockdown.

“The beetle salvaged spruce trade out of Europe into China is looking to resume, and there are quantities of bushfire damaged logs now being shipped out of Australia. Likewise, the domestic timber market has been shutdown and nobody is sure what the local demand will be in the new economy which will emerge when Coronavirus is under control.”

He says the FGLT will review and revise its budget over the next few months: “That may mean we are able to reinstate the budget-cut we have made if the markets go well enough to fill the gap of the past two months. We are committed to the least disruption as possible to indicate our commitment to the forestry industry.”

NZL