Domestic and export markets work in unison
LOG SUPPLY TO DOMESTIC AND EXPORT markets is inextricably linked and can’t be separated, as Forestry Minister Shane Jones proposed, says Forest Owners Association President, Phil Taylor.
A forest harvest will produce higher grade logs for domestic construction, some logs for export and some lower value wood which is only suitable for domestic chipping.
“We just can’t go in and cut down some parts of a tree to cater to one market without harvesting the whole tree for other markets too. That was clearly shown up when forest companies were unable to export earlier in the year and how difficult it physically was to keep our local mills supplied,” says Mr Taylor.
“It’s not true either that we send all our logs overseas. In most years, the majority of the export value of our forest products comes from added value categories, such as sawn timber and pulp and paper,” he adds.
About 15 million tonnes of logs a year are consumed by domestic processors, representing just under half of the total annual harvest from New Zealand’s forests. “That has been remarkably consistent and a welcome market for us over the past 20 years,” says Mr Taylor.
“The shut-down has meant we are getting increasing reports of tens of thousands of tonnes of logs left deteriorating on harvest sites and in yards around the country, which urgently need to be exported or processed before they are worth nothing,” he says.
“When we do get back to business, we’d welcome new infrastructure projects the government says it intends to generate to get the economy going. It would be tremendous if wood construction was a major part of that.
“It would also be great if some of these wood dependent projects could be in the regions. That would help those communities which grow, supply and process these logs. The forests are often in regions where other employment opportunities are generally scarce,” he adds.
Mr Taylor continues: “We are concerned for the forestry workforce in our rural communities. They have felt the market effects of Covid-19 right back to the beginning of this year, well before the shutdown began. Any restriction on exports has the potential to severely impact their well-being and that of their families. Shane Jones is talking about creating new jobs. We’d love to see those, but not if we fail to protect current ones. We need a sustainable domestic market for our logs in New Zealand, just as we need a healthy export market.”
Chief Executive of the Forest Industry Contractors Association, Prue Younger, says contractors as an industry sector will want to get back to work as quickly as possible, whether it be export logs or domestic processing.
“Both offer opportunity to return our contractors to financial viability,” she says.
“Ultimately stability with the right product balance needs to be the medium term vision where retention of a skilled workforce is seen as pivotal to the supply chain. Otherwise once again they hold the greatest risk as has become apparent through recent episodes of low log prices and the COVID-19 crisis,” Ms Younger adds.
The Farm Forestry Association shares Mr Taylor’s concerns.
President, Hamish Levack says: “If the government introduced compulsory acquisition at low prices for instance, then I suspect most farm foresters, because they are not going to harvest at a loss, would shut up their woodlots and wait for a change of government. Our sector represents 40% of the currently harvestable trees.”
Mr Taylor concludes: “Right now, we cannot afford to take an ‘everyone for themselves’ approach. It is more important than ever for all parts of our supply chain to work together in order to deliver solutions that are the best for all.”
NZL