Record low interest rates and greater housing construction are driving up the price of Australian pine trees, according to Australia’s largest forestry investment company. Source: ABC Rural
A new report released by the Federal Government indicates Australia’s housing construction is up 17%, and general log harvesting is up 8% to 27 million metric tonnes.
New Forests chief executive officer David Brand said low interest rates had caused more construction.
“When interest rates go down, mortgage rates go down, people are able to buy new houses. When people build houses, they need structural lumber to build those houses and so demand for timber goes up,” he said.
“That pushes up the price of timber and then that pulls in imports as well.” The value of blue gum woodchips also has increased by 10% to $2.8 billion in export value, but imports of foreign materials still account for $3 billion more of wood utilised in Australia. Japan’s interest in Australian wood has waned, but Mr Brand said China was increasing its demand for woodchips to make household items.
“Where the real growth is happening is things like tissues and baby diapers and even rayon,” he said.
The south-east of South Australia has a huge density of Australia’s pine and blue gum plantations.
Mr Brand said while export demand was strong for Australian wood products, New Forests did not have any immediate plans for wide scale planting in the region. “Right now we’re ramping up harvest,” he said.
Mr Brand said if the price stayed strong, the company would investigate the possibility of new planting of pine and blue gums.
Blue gum trees generally grow for between 12-14 years before they are harvested. Pine trees have about a 30-year maturity with an intermediate harvest, where trees are thinned out for smaller logs or wood chips.
