New Zealand’s forestry industry faces supply fluctuations

According to the Wood Council of New Zealand Inc (Woodco), there is a supply challenge for many regions in New Zealnd in the domestic processing industry.

Currently, timber processors are hindered by the lack of logs, especially for the higher grades, said Woodco Chair Brian Stanley. He further explained that small scale woodlot owners are being enticed into quick export contracts instead, where the buyers are not providing the domestic processors with an opportunity to purchase these logs.

“The problem is not so much with the large scale dedicated forest operators who depend on being able to supply a constant volume into both the local and export markets and are managed and equipped for this,” said Stanley. “In many areas small scale owners would do well to get expert advice on terms and conditions for their sale and who to sell to, and not rush into contracts just because their logs are nearly mature. A slightly longer term view might provide a better return.”

The security of future investment into both forestry and processing in New Zealand has also suffered from fluctuations in government policy during the past 30 years.

“If anyone is going to invest in more processing, they need to be sure that there will be a continuous supply of logs, especially where small farm scale woodlots are an important source of that log supply,” said Stanley. “This requires stable and long term policy. Woodco is united in its position that government should not attempt to control price or volume on forest products or production. That wouldn’t work.”

Stanley delved deepeer saying that nobody can do anything now about the variable government incentive policies that have influenced planting over the past two decades, especially for small scale woodlot owners, and the resulting fluctuations in harvest a number of years later.

“The forest industry is our number two primary export earner behind dairy, and is too important and long term to be subject to government influenced or controlled variable pressures outside the marketplace, such as the mad fluctuations in the prices for carbon credits we’ve seen in the past six years,” he said.

And the benefits to New Zealand of a confident forest industry are many.

“Forestry is a major player in regional development. Our trees lock up close to half a billion tonnes of carbon. And timber is an ideal, affordable and robust building material.” 

Stanley suggested that there are a range of government policies which would help further develop local processing capacity and competitiveness, from more research into wood processing, through to accelerated depreciation and rural roading assistance.

 

Source: Wood Council of New Zealand Inc.