February prices for New Zealand logs post biggest gain since April 2013, reaching up to NZ$140/tonne; average increase in 2013 was 24%, with China accounting for 73% of total export value of NZ$2.35B

DUNEDIN, New Zealand , March 7, 2014 () – Export prices at the wharf gate are continuing to increase, which is drawing big increases in supply. Export volumes in 2013 were up 21% year-on-year, to 16.5 million m³. Prices for February were up to NZ$125/tonne for A-grade at the wharf gate in Tauranga, and the high end of the spread has reached $140/ tonne. Average prices for NZ exports are up 4-6% for export logs this month, the biggest rise since April last year. This is a record price level for A-grade exports, and the highest prices for K-grade logs since 1994.

The value of logs exported from NZ in 2013 was the highest ever for a full year. This was contributed to by both a record volume of logs being exported, and near to record prices sustained throughout the whole year. Demand from China is the single biggest driving force of this increase. The value of logs exported rose by NZ$777 million to NZ$2.35 billion, with average export log prices increasing 24%. Log exports contributed 46% of the total export value from forestry, up from 35% in 2012 and 20% five years ago. Exports to China made up 73% of the value of NZ’s log exports.

CHINA

Activity in China is in a bit of a lull currently due to the Chinese New Year holiday. China imported close to 33 million m³ of softwood logs during 2013, up 23% on 2012. Lumber imports increased 20% to 17 million m³. NZ was the largest supplier, with over 11 million m³, followed by the US at 5.3 million m³.

There was a 55% increase in imports from the US, though the total increase in volume was 1.9 million m³, compared with an increase of 2.5 million m³ from NZ. There was a big increase in supply from destinations outside of ‘the big three’ of NZ, Russia and PNW during 2013. There was 4.4 million m³ imported to China from outside these countries in 2013, much greater than the 1.8 million m³ in 2012 and 3.0 million m³ in 2011.

The big increases came from Eastern Europe, in particular Ukraine, where supply increased by almost 1 million m³ year-on-year. This volume now represents 13% of China’s imports, and could grow further as prices hold at levels this high.

Source: www.nzxagri.co.nz/agrifax

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