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BusinessDesk: Forestry exports grow 28% on strong Asian demand

BusinessDesk: Forestry exports grow 28% on strong Asian demand

By Hannah Lynch

New Zealand’s sawn timber exports to China have been ‘hammered’, while raw log shipments surged in the wake of Beijing’s efforts to cool the economy and amid increased sales by rival forestry nations such as Canada, according to the industry lobby group.

Lumber exports fell 16 percent to $264 million in the four months ended Sept. 30, according to New Zealand Timber Industry Federation figures. Exports to China fell 19 percent to $44.7 million and shipments to the US fell 23 percent to $40.2 million.

Log exports rose 28 percent to $509 million in the four months ended Sept. 30. Exports to China rose 47 percent to $337 million and shipments to the Japan increased 16 percent to $30 million.

“Sluggish demand for lumber sees big excess capacity at Chinese sawmills,” said Brent Coffey, the federation’s head. “Construction is down so lumber for concrete formwork is down.”

Changes in demand in China are coming as a weak residential construction sector in New Zealand saps local demand. Companies including Fletcher Building have reported weaker profits in the face of a soft property market and delays in the rebuilding of Christchurch.

“It is a difficult economic backdrop” for the timber industry, said Philip Borkin, economist at Goldman Sachs New Zealand. Still, “the market is incredibly volatile and you have to be careful when reading between quarters.”

The lobby group’s report, in a newsletter that Coffey sends to members, comes after government data showed New Zealand’s forestry exports grew through most of last year on strong Asian demand.

In July, Ministry of Agriculture and Forestry data showed the total value of kiwi log exports rose $800 million to $4.4 billion in the 12-months ending March 31, driven predominantly by exports to China.

(BusinessDesk)

Indicative log pricies are here »

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3 Comments

Several years ago i had a small amount of money to invest.My friends all said to get a rental,but because the amount of money ihad was small i invested in Forestlands in Motueka.

Ihope i have made the right decision.

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So who has the price list on frames and trusses using local pine and DF....do we see prices dropping....a key building component....

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Tui for willy.

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