Forestry Production and Exports
For the quarter ended 31 December 2005
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Overview
The forestry industry has faced a number of challenges in 2005: a strong New Zealand dollar; increasing competition in some of New Zealand’s key markets; and high fuel, labour and shipping costs, though these have come back slightly in recent months.
In combination, these factors have had an impact on the sector’s profitability and have contributed to the drop in wood exports compared to the same time in 2004. As returns to producers have been lower some New Zealand forest growers have reduced harvest volumes and some timber processors have scaled back production. Forecasts are for production and exports to pick up late in 2006, in line with a depreciating exchange rate and improved international prices.
The quarter ended December 2005 showed a slight depreciation in the New Zealand dollar and an easing of shipping costs. Forestry exports have reflected this change in market conditions with an upturn in some exports in this quarter.
Production
The main changes between the quarter ended 30 September 2005 and the quarter ended December 2005 were in the volumes of veneer, plywood and sawn timber produced.
Veneer and plywood
Production of both veneer and plywood are down on the quarter ended September 2005 and on the quarter ended 31 December 2004 because of reduced sales. Over the past year stocks of veneer and plywood have been building because of these reduced sales. This has lead to some companies making the decision to cut back production of these products till sales volumes pick up and stock levels reduce. Also, industrial action at Carter Holt Harvey’s laminated veneer lumber (LVL) plant in Whangarei has contributed to lower volumes of veneer and LVL produced.
Sawn timber
Production of sawn timber for the quarter ended December 2005 was 1 008 000 cubic metres, down 13.8 percent from the quarter ended September 2005. The December 2005 quarter volume was also 6.0 percent lower than production in the quarter ended December 2004. Sawmillers faced significant pressure during the quarter ended December 2005 because of the strong New Zealand dollar. This is impacting on the profitability of sawmilling operations, some of which have scaled back production or closed over the quarter.
Production cycles
Production of most products during the quarter ended December 2005 was down on the volumes produced in the quarter ended September 2005 because of fewer working days in the quarter due to Christmas and other statutory holidays.
Production usually follows this yearly cycle, except for pulp and paper production. A number of pulp and paper mills have planned shutdowns for annual maintenance during the quarter ended September, so production in this quarter is usually low. Compared to the quarter ended December 2004, the December 2005 quarter shows little change in the quarterly production of pulp and paper.
Table 1: Production volumes
| Quarter ending 31 December 2005 (000 m3) |
Change on quarter ending 30 September 2005 (%) |
Change on quarter ending 30 December 2004 (%) |
|
|---|---|---|---|
| Roundwood | 4 822 | -5.4 | 0.8 |
| Sawn timber | 1 008 | -13.8 | -6.0 |
| Pulp | 415 | 4.1 | 1.1 |
| Paper | 244 | 6.0 | 2.4 |
| Fibreboard | 227 | -2.8 | 2.5 |
| Veneer | 145 | -19.5 | -15.3 |
| Plywood | 90 | -17.7 | -13.7 |
| Particleboard | 60 | -8.7 | -3.5 |
Table 2: Quarterly export volumes
| Quarter ending 31 December 2005 (000) |
Change on quarter ending 30 September 2005 (%) |
Change on quarter ending 30 December 2004 (%) |
|
|---|---|---|---|
| Logs and poles (cubic metres) | 1 440 | 5.1 | 12.7 |
| Sawn timber (cubic metres) | 468 | -2.6 | -1.2 |
| Pulp (tonnes) | 209 | 4.4 | -14.3 |
| Fibreboard (cubic metres) | 191 | 10.8 | 6.5 |
| Plywood (cubic metres) | 26 | 4.4 | -27.3 |
| Particleboard (cubic metres) | 20 | -42.1 | -47.0 |
Table 3: Quarterly export values
| Quarter ending 31 December 2005 (NZ$ 000) |
Change on quarter ending 30 September 2005 (%) |
Change on quarter ending 30 December 2004 (%) |
|
|---|---|---|---|
| Logs and poles | 123 451 | 3.7 | 38.6 |
| Sawn timber | 182 521 | -5.1 | -11.5 |
| Pulp | 116 823 | 8.4 | -8.9 |
| Fibreboard | 63 980 | 6.5 | 2.9 |
| Plywood | 30 398 | -10.9 | -32.4 |
| Particleboard | 9 957 | -44.8 | -55.3 |
Exports
The volume of forestry products exported for the quarter ended December 2005 increased on the quarter ended September 2005 for all products except sawn timber and particleboard. The key changes over this period were in the volumes of logs and poles, pulp and fibreboard exported.
Logs and poles
The volume of logs and poles exported during the quarter ended December 2005 increased by 5.1 percent on exports in the quarter ended September 2005, to 1 440 000 cubic metres. Logs and poles exports were valued at NZD123 million, up by 3.7 percent on the quarter ended September 2005.
The main markets for New Zealand’s logs and poles are Korea, Japan and China. Export volumes to Korea for the quarter ended December 2005 were up 18 percent on the quarter ended September 2005, to 887 000 cubic metres. Export volumes to Japan decreased 12 percent, to 204 000 cubic metres, and volumes to China fell 20 percent, to 171 000 cubic metres for the quarter ended December 2005. Competition in these markets from cheaper priced logs and lumber from Chile has been a factor in New Zealand’s smaller market share in the December 2005 quarter.
Compared to the year ended December 2004, export volumes of logs and poles for the year ended 2005 have decreased 5.9 percent while values have decreased by 5.3 percent. The main reason for the decrease is the reduction in harvesting due to poor market conditions.
Wood pulp
Wood pulp export volumes totalled 209 000 tonnes for the December 2005 quarter, up 4.4 percent on the 200 000 tonnes exported in the previous quarter. The value of wood pulp exports also rose, up 8.4 percent to NZD116 million over the same period. Higher production of pulp during both the quarters ended September and December 2005 is the main driver behind the increase in pulp exports.
Compared to the year ended December 2004, pulp exports for the year ended December 2005 were down by 2.7 percent in volume and 10.8 percent in value. The high value of the New Zealand dollar against New Zealand’s main pulp trading partners between the December 2004 and December 2005 years has been the main cause of the decline in pulp exports for this period.
Fibreboard
Fibreboard export volumes were 191 000 cubic meters for the quarter ended December 2005, up 10.8 percent on the quarter ended September 2005. The value of fibreboard exports also rose, up 6.5 percent to NZD64 million over the same period. Compared to the year ending December 2004, fibreboard exports for the year ended December 2005 were down by 0.3 percent in volume and 1.9 percent in value.
Table 4: Annual exports
| Exports | Export volume year ended 31 December 2005 (000 m3) |
Change on year ended 31 December 2004 (%) |
Export value year ended 31 December 2005 (NZ$ 000) |
Change on year ended 31 December 2004 (%) |
|---|---|---|---|---|
| Logs and poles | 5 195 | -5.9 | 443 | -5.3 |
| Sawn timber | 1 805 | -2.3 | 723 | -10.7 |
| Pulp | 838 | -2.7 | 456 | -10.8 |
| Paper and paperboard | 674 | 8.4 | 537 | 7.9 |
| Panel products | 1 042 | -2.0 | 517 | -9.7 |
| Other forestry products | - | - | 447 | -3.4 |
| Total exports | - | - | 3,123 | -6.0 |
Table 5: Annual Imports
| Imports | Import volume year ended 31 December 2005 (000 m3) |
Change on year ended 31 December 2004 (%) |
Import value year ended 31 December 2005 (NZ$ 000) |
Change on year ended 31 December 2004 (%) |
|---|---|---|---|---|
| Logs and poles | 5 432 | 49.7 | 4 | 91.4 |
| Sawn timber | 57 794 | 34.0 | 58 | 18.8 |
| Pulp | 4 125 | -11.9 | 5 | 0.7 |
| Paper and paperboard | 487 196 | 4.7 | 660 | 1.1 |
| Panel products | 32 435 | 51.6 | 34 | 10.9 |
| Furniture and furniture parts | - | - | 206 | 7.6 |
| Other forestry products | - | - | 379 | -4.9 |
| Total imports | - | - | 1,346 | 1.3 |
Imports
The value of forestry products imported for the year ended 31 December 2005 showed little change on 2004, increasing by only 1.3 percent. The main changes over this period were in imports of sawn timber and panel products.
The volume of panel products imported for the December 2005 year increased 51.6 percent on import volumes for the year ended December 2004, to 32.4 million cubic meters. A strong domestic housing market in 2005 may have been the cause of this rise. The high New Zealand dollar cushioned the rise in import values of panel products, which increased by 10.9 percent for the year. Import volumes of sawn timber also rose this year, up 34 percent on 2004 volumes, to 57.8 million cubic meters, whilst values rose 18.8 percent. This increase is also expected to have resulted from New Zealand’s buoyant property market for the year ended 31 December 2005.
Published by the Ministry of Agriculture and Forestry
PO Box 2526, Wellington, New Zealand
Tel: 64 4 894 0100 Fax: 64 4 894 0742
Web: www.maf.govt.nz Email: stats_info@maf.govt.nz
Published 23 May 2006
ISSN: 0114-5371
© Crown copyright 2006 – Ministry of Agriculture and Forestry. This document may be copied providing its source is acknowledged.
While every effort has been made to ensure the information in this publication is accurate, the Ministry of Agriculture and Forestry does not accept any responsibility or liability for error of fact, omission, interpretation or opinion that may be present, nor for the consequences of any decisions based on this information.
Download accompanying tables as CVS Files
- Quarterly sawn timber prod [5KB CSV]
- Annual sawn timber prod [5KB CSV]
- Pulp production [5KB CSV]
- Paper and paperboard prod [5KB CSV]
- Panel production [30KB CSV]
- Roundwood removals [30KB CSV]
- Log exports [KB CSV]
- Hardwood chip exports [10KB CSV]
- Softwood chip exports [5KB CSV]
- Sawn timber exports [5KB CSV]
- Mechanical pulp exports [45KB CSV]
- Chemical pulp exports [10KB CSV]
- Fibreboard exports [10KB CSV]
- Plywood exports [5KB CSV]
- Particleboard exports [5KB CSV]
Contact for Enquiries
Monitoring and Evaluation
Innovation and Research Policy Directorate
Ministry of Agriculture and Forestry
Email: stats_info@maf.govt.nz
Phone: 64 4 894 0100
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