Exports largely stable, says report

FORESTRY EXPORT REVENUE INCREASED 1% TO $6.6 BILLION

in the year to 30 June 2022, driven by record high pulp prices offsetting a drop in demand for logs, according to the latest Situation and Outlook for Primary Industries (SOPI) quarterly report (December 2022).

For the year to 30 June 2023, forestry export revenue is expected to remain flat at $6.6 billion, as a weak New Zealand dollar offsets reduced demand.

The report states that demand for New Zealand logs remains relatively stable despite decreased softwood log imports into China. Log export revenue fell 5.9% in the year to 30 June 2022. This is a better result than previously forecast, largely due to a depreciation of the NZD against the USD and stronger than expected demand from China. New Zealand’s market share in China has increased as supply from Europe decreases. China’s property market continues to decline due to policies aimed at curbing debt and financial risks. While construction has slowed, government-led infrastructure projects have continued, which is providing demand support for New Zealand logs. Reduced shipping costs and a weak NZD are currently supporting log prices. Looking forward, log demand is forecast to decrease as China’s economy slows down and global demand also weakens, resulting in reduced log prices and export volumes.

Domestic demand for sawn timber is forecast to decrease and export revenue to increase. As higher interest rates work their way into the New Zealand economy, house prices are expected to continue falling and construction is forecast to slow, putting downward pressure on domestic demand for wood. Demand is expected to slow in key export markets for similar reasons, as interest rates rise and the global economy cools. More New Zealand producers will be looking at export markets to divert products that would have otherwise been consumed domestically. Therefore, sawn timber production is forecast to decrease and export volumes to remain stable. Input costs for wood product manufacturing have increased 11%, and a weak exchange rate is causing shipping costs from New Zealand to be more expensive than from other countries, which puts some downward pressure on profit margins. However, sawn timber export prices reached highs of an average $739 per cubic metre in the September quarter of 2022, a 15% increase compared to a year ago. Prices have come down in USD terms, but a weak NZD is supporting export prices. Looking forward, prices are forecast to come down as export demand slows further.

Pulp prices are at highs. In the September quarter, average pulp prices reached NZ$1,093 per tonne, an 18.7% increase from a year ago. Global and domestic supply constraints are contributing to these higher prices, including project delays, mill closures and input cost increases. A weak NZD against the USD is currently supporting pulp prices, which are forecast to come off highs in 2023 as global supply increases and demand slows. Export quantities have declined but are predicted to be steady over the forecast period. Strong long term demand drivers such as a growing middle class in Asia continue to be relevant for the longerterm export outlook. NZL

“ANY BUSINESS WITH FIELD STAFF SHOULD STAY ON TOP OF HOW those workers go about their job on an ongoing basis. It can be easy for safety to be compromised without workers necessarily realising it while they’re working remotely, and employers need to be attuned to that risk,” says WorkSafe Area Investigation Manager, Danielle Henry, in light of an investigation into the death of a forestry technician in northern Hawke’s Bay two years ago.

Inadequate training and supervision contributed to the death, he says. The 48-year-old was fatally crushed at Quail Ridge Forest in Putere, near Wairoa, in November 2020. The man was repairing a harvester head, when the device was activated by being manually spun.

Employer, Waratah Forestry Services, pleaded guilty to health and safety failures.

WorkSafe identified that Waratah’s field technicians had been inadequately trained about the risks and controls involved in such a repair job, and weren’t properly monitored to correct any unsafe practices.

“Although the field technicians were provided with some safety instruction, the manuals for the harvester head were large and the ‘buddy’ training system the business had was insufficient. There was no other supervision and monitoring of the field technicians’ safety knowledge and practices,” adds Mr Henry.

“The victim was a much-loved father, husband, and brother and it’s important we recognise the family’s loss as this case comes to a close,” he says. NZL