Log price drop impacting smaller operators

Friday 5 Jul 2019

Stockpiles of pinus radiata logs in China have depressed New Zealand wharf-gate prices by about $US20 ($NZ29.70) during the past fortnight, putting pressure on the jobs of smaller contract logging crews. Anecdotally, four logging crews around Southland and North Otago have been laid off in recent weeks, affecting 20 to 25 staff.

Major estate forest owners are not considering laying off staff, despite the expectation prices will be depressed for the next two to three months. The extra Pinus radiata accumulating on China's wharves is affecting the sector nationwide but should be a ''short-term correction'' that may take until September or October to revive, Southern Wood Council chairman Grant Dodson said.

''Yes, it's the logging crews in the woodlot sector who are most vulnerable,'' he said. The woodlot sector is defined as small farm forestry investments, who are deciding not to engage contractors to cut their forest lots because of the depressed prices. ''The woodlot operators have one opportunity to cut it down, so want to avoid the [low price] trough,'' Mr Dodson said.

Mike Hurring, of Mike Hurring Logging and Contracting, in Balclutha, said all his eight logging crews were intact, relying mainly on working with corporate clients at present. ''We've been riding a good wave prior. It [price] can come back without hurting too much ... it's been pretty good for the past four or five years,'' he said of record prices achieved with mainly China. He understood three crews in Southland and one in North Otago had been laid off.

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Source: ODT

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