Forestry industry insights quarterly updateFriday 24 Jan 2025
This quarter, export revenue for forestry is showing signs of improvement, while wood processing products are displaying mixed results over the last three months to October 2024. Volumes of wood products manufacturing and domestic log prices showed little variation, while building consents are ticking upward very slowly. Whilst building consents increased by 3.5% for the quarter ended October 2024, there has been a 16% year-on-year decrease in the number of new dwellings consented. The recent release of the National Exotic Forest Description (NEFD) 2024 reported an increase in the size of New Zealand’s forestry estate, but a decrease in standing volume for the year-ended April 2024. This year’s report used spatial data for the first time for forests smaller than 1,000 hectares in the East Coast and Hawke’s Bay. Domestic log prices decreased slightly in the October 2024 quarter. We may see a positive change in prices in the next quarter if the slow and steady increase of building consents continues. At Wharf Gate (AWG) A-grade export log prices increased 13.2% for the October quarter reflecting a mix of better exchange rates, lower inventories at China ports and lower shipping rates. Chinese government initiatives promoting housing renovations and interior decoration may also provide future benefits for the New Zealand log export market. Export revenue for paper and paperboard, sawn timber and sleepers, and other forestry products have all increased on a quarter-to-quarter and a year-on-year basis. However, chips, panels, and pulp have produced negative export revenue performance for the same periods. Australia and New Zealand paper and packaging On 20 November 2024, Oji Fibre Solutions (OjiFS) has announced plans to discontinue paper production and focus solely on pulp manufacturing at the Kinleith Mill in New Zealand. Oji is currently consulting on their proposal with their employees. This mill supplies paper to three of Oji’s Australian-based packaging facilities, potentially creating ripple effects across the Tasman. This situation aligns with a broader trend of declining demand for printing and communication papers in Australia, where consumption has dropped by an average of 10.1% annually over the past decade. EU Deforestation Regulation (EUDR) The implementation of the EUDR, initially set for December 2024, has been delayed for 12 to 18 months, depending on business size, allowing more time for compliance. The regulation aims to curb deforestation and forest degradation by requiring detailed geo-location data from exporting countries. However, it has faced criticism from nations like Indonesia, the USA, and China, citing concerns over its country-rating approach and security concerns of detailed geo-locations. View the full report. Source & image credit: Te Uru Rākau – New Zealand Forest Service ![]() | ||
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