Combined exports of softwood logs from New Zealand and Australia totalled 26.4 million m3 in the 2018-19 financial year. Total exports from the two countries lifted 9.5% compared with the prior year, in line with the 10.5% per annum increases recorded over the decade since 2009. Source: Timberbiz
New Zealand’s softwood log exports dwarf those of Australia. At 22.3 million m3, New Zealand’s exports were 12.3% higher than the year before and accounted for 84% of total regional exports. Australia’s 4.1 million m3 of exports were down 3.5% on the prior year and accounted for just 16% of total exports.
Recording their third successive annual record, the combined softwood log exports are large, and by some measures, impressive. For others, they represent a worrying and long-standing trend of raw commodity sales, where they argue more logs should be made available for local processing.
As the chart shows, log prices are, on average, following very similar trends when described in US dollars.
In 2009, Australia’s actual average log export prices were half those of New Zealand. Even though New Zealand’s log prices increased 46% from 2009 to 2011, Australia’s prices caught up with the New Zealand price by more than tripling. Since then, the price growth has been largely consistent and generally, very strong.
Over the decade, New Zealand’s softwood logs returned an average 65% more per cubic metre, while Australia’s returned something close to 280% more per cubic metre at the end of the decade than they did at the start.
Although it is not as simple as this in detail, essentially what has occurred, is Australia’s softwood log exports have entered the general global trade, and in patterns of supply similar to those of New Zealand. In the short-term, IndustryEdge expects supply to continue to be sufficiently similar for pricing to also be similar, between the two countries.
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