Log prices soaring

AS LOG PRICES SOAR ON THE BACK OF DEMAND FROM CHINA,

strong domestic construction activity and tight global supply, particularly from Australia and Europe, forestry is helping power a recovery in regional New Zealand.

According to BusinessDesk, in the latest ASB Regional Scoreboard, the two top spots in the rankings were held by the forestry powerhouses of Northland and Gisborne. The New Zealand Regional Economic Scoreboard takes the latest quarterly regional statistics and ranks the economic performance of New Zealand’s 16 regional council areas.

Prices aren’t far off the highs they hit back in 2018-19, with ASB Bank’s forestry indices lifting 5% in New Zealand dollar terms over Q4 2020 and then a further 6% over Q1 this year. The index is currently $10 above the two-year average, $6 above the three-year average, and $6 above the five-year average.

The PF Olsen Log Price Index remained at $130 in March due to the stable at wharf gate (AWG) prices. The cost and freight prices for New Zealand pine logs in China increased approximately US$5 over the last month and continue to increase.

The price for A-grade logs is now around US$158 per Japanese Agricultural Standard (JAS) cubic metre and it is expected log exporters will continue to ask for increased pricing to compensate for increased shipping costs.