Forestry Production and Exports
For the quarter ended 31 March 2006
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Overview
There were some promising signs for the forestry industry during the March 2006 quarter. The New Zealand dollar fell 4.4 percent during the March 2006 quarter, according to the Reserve Bank’s Trade Weighted Index (Statistics NZ Hot off the Press Overseas Merchandise Trade, March 2006). In addition, both export and domestic log prices showed signs of recovery, and shipping costs eased slightly. However, high energy costs and a shortage of skilled labour continue to keep both production and exports down.
As a result, some New Zealand forest growers continue to harvest at lower levels and timber processors are still scaling back production. Roundwood removals decreased 12.8 percent in the March 2006 quarter, down to 4.2 million cubic metres from 4.8 million cubic metres in the December 2005 quarter.
Ministry of Agriculture and Forestry (MAF) forecasts are for forestry production and exports to pick up late in 2006, in line with a depreciating exchange rate and improved international prices.
Production
The main changes between the December 2005 quarter and the March 2006 quarter were decreases in the production of sawn timber, wood pulp and fibreboard, and an increase in the volume of veneer produced.
Sawn timber
Production of sawn timber in the March 2006 quarter was down on both the December 2005 quarter (2.4 percent) and March 2005 quarter (0.2 percent) to 970 000 cubic metres. The provisional March 2006 annual production was also down (3.6 percent) on the year ended March 2005 due to the strong New Zealand dollar. While the New Zealand dollar fell slightly during the March 2006 quarter a number of mills have closed over the previous 12 months due to poor returns and it will take a while for production to rebuild.
Wood pulp
In the March 2006 quarter wood pulp production dropped 13.9 percent on the December 2005 quarter volume to 357 000 tonnes. This was caused in part by higher than usual production in the December 2005 quarter as one of the mills built up its stock levels in preparation for a planned maintenance shutdown in March 2006. This planned shutdown meant the mill didn’t produce any wood pulp for the month of March 2006. High electricity prices were also stated as a factor contributing to lower production by the mills in the MAF quarterly survey of pulp, paper and paperboard mills.
Fibreboard
The volume of fibreboard produced in New Zealand fell 3.5 percent in the March 2006 quarter compared with the December 2005 quarter, but was up 25 percent on the March 2005 quarter. During the March 2005 quarter, fibreboard production was lower than normal due to scheduled maintenance shutdowns and a fire at one of the fibreboard plants.
Veneer
Veneer production in the March 2006 quarter was up 9.4 percent on December 2005 quarter volumes. The December 2005 quarter volume was lower than both the September 2005 and December 2004 quarters because of reduced sales, an unscheduled shutdown at one of the plants and industrial action during the quarter (see Statistical Release 04/2006). Production in the March 2006 quarter was down on the March 2005 quarter 3.2 percent due to unfavourable market conditions such as the high New Zealand dollar and high price of energy.
Production cycles
Production of most products during the March 2006 quarter was down on the volumes produced in the December 2005 quarter. March quarter production is usually low because statutory holidays and the Christmas break reduce the number of working days in the quarter. A number of mills also plan shutdowns for annual maintenance during the March quarter, so March quarter production is usually low.
Quarterly production for most products showed little change between the March 2005 and the March 2006 quarters, with two exceptions. Wood pulp decreased 9.8 percent in the March 2006 quarter because of a scheduled maintenance shutdown and lower production due to high electricity prices, while fibreboard increased 25 percent, reflecting lower than normal production in the March 2005 quarter.
Table 1: Production volumes
| Quarter ended 31 March 2006 (000) |
Change on quarter ended 31 December 2005 (%) |
Change on quarter ended 31 March 2005 (%) |
Year ended 31 March 2006 (000) |
Change on year ended 31 March 2005 (%) |
|
|---|---|---|---|---|---|
| Roundwood (m3) | 4 182 | -12.8 | -3.7 | 18 984 | -1.4 |
| Sawn timber (m3) | 970 | -2.4 | -0.2 | 4 247 | -3.6 |
| Wood pulp (t) | 357 | -13.9 | -9.8 | 1 563 | -1.5 |
| Paper (t) | 230 | -5.5 | -4.5 | 940 | 2.1 |
| Fibreboard (m3) | 219 | -3/5 | 25.0 | 899 | 6.3 |
| Veneer (m3) | 159 | 9.4 | -3.2 | 670 | -3.6 |
| Plywood (m3) | 91 | 1.4 | -2.8 | 397 | -2.8 |
| Particleboard (m3) | 51 | -14.9 | 2.8 | 243 | 5.6 |
Exports
In spite of the easing in market conditions, the volume of forestry products exported in the March 2006 quarter was less than the volumes exported in the December 2005 quarter for all products (for which volumes are available) except wood pulp and particleboard.
The biggest change over this period was the drop in exports of logs and poles. This is the most significant factor in the decrease in roundwood removals (down 12.8 percent) in the March 2006 quarter. Sawn timber exports also decreased in the March 2006 quarter, again suggesting that improving market conditions have not yet impacted on the sector.
For the March 2006 year, the value of exports of forestry products was down by 2.8 percent on the March 2005 year. However, export volumes (as calculated in roundwood equivalents) rose 1.2 percent over the same period.
Logs and poles
The volume of logs and poles exported during the March 2006 quarter decreased 32.6 percent, to just 970 000 cubic metres, from 1.4 million cubic metres in the December 2005 quarter. Logs and poles export volumes were also down (11.2 percent) on the March 2005 quarter. Logs and poles exports for the March 2006 quarter were valued at NZ$93 million, down 24.7 percent on the December 2005 quarter, and up 4.4 percent on the March 2005 quarter.
Export volumes for logs and poles to New Zealand’s three main markets all declined in the March 2006 quarter compared with the December 2005 quarter. Export volumes to Korea fell 43.6 percent (to 499 000 cubic metres), while volumes to Japan decreased 9.0 percent (to 186 000 cubic metres), and volumes to China fell 6.1 percent (to 161 000 cubic metres).
Compared with the year ended March 2005, export volumes of logs and poles for the year ended March 2006 have decreased 1.0 percent while values have increased 8.9 percent. Log prices have risen over the past year. The four quarter average for the year ended March 2006 is up six dollars on the March 2005 average, having risen from NZ$86 to NZ$92 (MAF log price series). The values reported here are free on board (FOB) prices, which include transport costs to the port. Rising oil prices would have had an upward effect on these values. Improved export log prices have yet to impact on volumes exported though, due possibly to high shipping costs and low business confidence within the forestry sector.
Wood pulp
Wood pulp export volumes totalled 222 000 tonnes in the March 2006 quarter, up 6.2 percent on the 209 000 tonnes exported in the previous quarter. The value of wood pulp exports also rose, up 13.6 percent to NZ$133 million over the same period. The increase in wood pulp exports reflects record production levels in the December 2005 quarter.
Compared with the year ended March 2005, wood pulp exports for the year ended March 2006 were up 1.7 percent in volume but down 2.8 percent in value. International wood pulp prices are being held at a low rate because of difficulties in the paper manufacturing industry.
Fibreboard
Fibreboard export volumes were 177 000 cubic metres in the March 2006 quarter, down 7.3 percent on the December 2005 quarter. The value of fibreboard exports also fell, down 7.1 percent to NZ$59 million over the same period. Compared with the year ended March 2005, fibreboard exports for the year ended March 2006 were up 5.9 percent in volume and 2.1 percent in value.
Table 2: Quarterly export volumes
| Quarter ended 31 March 2006 (000) |
Change on quarter ended 31 December 2005 (%) |
Change on quarter ended 31 March 2005 (%) |
|
|---|---|---|---|
| Logs and poles (m3) | 970 | -32.6 | -11.2 |
| Sawn timber (m3) | 408 | -12.1 | 5.1 |
| Pulp (t) | 222 | 6.2 | 7.9 |
| Fibreboard (m3) | 177 | -7.3 | 22.4 |
| Plywood (m3) | 25 | -6.7 | -17.5 |
| Particleboard (m3) | 22 | 12.1 | -6.9 |
Table 3: Quarterly export values
| Quarter ended 31 December 2005 (NZ$ 000) |
Change on quarter ended 30 September 2005 (%) |
Change on quarter ended 31 December 2004 (%) |
|
|---|---|---|---|
| Logs and poles (m3) | 92 898 | -24.7 | 4.4 |
| Sawn timber (m3) | 158 811 | -12.7 | -2.5 |
| Pulp (t) | 132 694 | 13.6 | 19.8 |
| Fibreboard (m3) | 59 440 | -7.1 | 21.2 |
| Plywood (m3) | 33 480 | 10.1 | -9.5 |
| Particleboard (m3) | 13 378 | 34.4 | -7.3 |
Table 4: Annual exports
| Export volume | Export value | |||
|---|---|---|---|---|
| Year ended 31 March 2006 (000) |
Change on year ended 31 March 2005 (%) |
Year ended 31 March 2006 (NZ$ 000) |
Change on year ended 31 March 2005 (%) |
|
| Logs and poles (m3) | 5 072 | -1/0 | 446 939 | 8.9 |
| Sawn timber (m3) | 1 822 | -1.4 | 718 536 | -11.2 |
| Pulp | 854 | 1.7 | 477 776 | -2.8 |
| Paper and paperboard | 680 | 8.7 | 541 193 | 6.8 |
| Panel products (m3) | 1 061 | 0.4 | 510 812 | -11.7 |
| Other forestry products | - | - | 466 921 | 2.2 |
| Total exports | - | - | 3 162 178 | -2.8 |
Imports
The value of forestry products imported for the year ended March 2006 increased only 1.7 percent on the previous March year. Import prices rose because of a fall in the New Zealand dollar and higher fuel prices, but the rise was less than expected (Westpac, 12 June 2006). The main changes over this period were in imports of panel products, furniture and sawn timber. However, these changes have little effect on overall imports because the dominant imported product (paper and paperboard) increased only 1.5 percent by value.
The volume of panel products imported in the March 2006 year increased 51.1 percent on import volumes in the March 2005 year, to 35.8 million cubic meters. A strong domestic housing market in 2005 may have contributed to this rise. The relatively high New Zealand dollar cushioned the rise in import values of panel products, which only increased 7.0 percent for the March 2006 year. Import volumes of sawn timber also rose in the March 2006 year, up 17.8 percent on March 2005 volumes, to 58.7 million cubic metres, whilst values rose 9.8 percent over the same period.
Table 5: Annual Imports
| Import volume | Import value | |||
|---|---|---|---|---|
| Year ended 31 March 2006 (000) |
Change on year ended 31 March 2005 (%) |
Year ended 31 March 2006 (NZ$ 000) |
Change on year ended 31 March 2005 (%) |
|
| Logs and poles (m3) | 6 | 43.4 | 4 880 | 83.9 |
| Sawn timber (m3) | 59 | 17.8 | 59 041 | 9.8 |
| Pulp (t) | 5 | 39.0 | 5 798 | 41.6 |
| Paper and paperboard | 491 | 1.5 | 665 281 | 1.5 |
| Panel products (m3) | 36 | 51.1 | 34 269 | 7.0 |
| Furniture and furniture parts | - | - | 214 292 | 10.3 |
| Other forestry products | - | - | 379 187 | -4.6 |
| Total imports | - | - | 1 362 748 | 1.7 |
Notes
-
All production figures in this release are provisional, all March 2006 quarter export figures are provisional. Export values are New Zealand dollars free on board (FOB) (the value of goods at New Zealand ports before export), import values are the New Zealand dollars cost of goods including insurance and freight to New Zealand (cif).
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 17 July 2006
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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