Coronavirus – Latest forest industry update
Friday 28 Feb 2020
• New Zealand exporters are telling us that while China’s ports remain open, ports are at capacity with an inventory in excess of 6 million cubic metres, with limited room to stockpile further logs. China is prioritising clearing essential goods such as food and medical supplies and it is likely to take some time for log stockpiles to reduce.
• • Logging exports from New Zealand are being delayed or halted, for an uncertain period of time. This will have an impact on harvesters and forestry companies some of whom are reducing staff hours given a decision to reduce harvest targets and in some cases, laying off staff.
• Our MPI contacts in China are reporting that the activity of some wood markets has increased in the past week. However, market transactions have not yet returned to normal as the wood processing and construction sector has not yet resumed production. They estimate it will be at least until March 2020 until wood markets resume normal operations.
• There is a high level of uncertainty on the extent of the supply chain disruption and how quickly Chinese processors will use the stockpile that has built up.
• Some immediate supply chain impacts are some crews idled and others working below capacity. This has flow on effects for related companies, including the log freight industry.
• Te Uru Rākau is working closely with the Ministry of Social Development to link with the most affected regions to ensure those workers can access services such as job seeker support, accommodation supplement and special needs grants.
• Te Uru Rākau has linked Inland Revenue advice to the forestry sector so that impacted businesses can request extensions of time or apply for financial hardship for taxation liabilities. Inland Revenue advice is available on this link.
• Tax Management NZ a registered tax intermediary for the provision of tax pooling has set aside a dedicated $30m fund to help cash-strapped taxpayers in the forestry industry defer payment of provisional tax for the 2020 income year until June next year. Details attached.
• MPI will be meeting with the banks and other financial institutions to clarify how they are currently supporting the forestry and wider primary sectors, and what other actions they can take.
• Te Uru Rākau is working with the Department of Conservation to identify options for redeployment of affected forestry sector workers.
Forest Owners Association
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