New Zealand’s forestry trade is presently dominated by three countries, Australia, Japan and Korea. Between them, these countries absorbed 74% of New Zealand’s 1995 exports. This market concentration leaves New Zealand vulnerable to downturns in any of these markets and is leading to New Zealand actively seeking a more diversified market base, particularly seeking greater scope to trade in processed products. Sources: FOA, Timberbiz
Presently, logs comprise 82% of New Zealand’s exports to Korea and 30% of exports to Japan.
Figure 7: Value of NZ Forestry Exports by Destination Country 1991-1995 ($NZ)
A part of New Zealand’s future trade strategy will be to substitute processed products for logs into Japan and Korea. Some slow progress has been made in this direction in Japan. New opportunities in these markets are expected as supply shortfalls from Indonesia and Malaysia occur, however, offsetting this will be reduced opportunities in the Australian market as that market moves toward self-sufficiency.
Increasing production from Australia is a major concern for New Zealand since Australia presently absorbs around 30% of New Zealand’s exports, including a considerably higher proportion of processed products. Increasing efforts are being devoted to the development of new markets.
In the long run, New Zealand may well find itself selling the bulk of its logs into Korea and China with some sawn timber being exported to these markets as well. China, although historically not proving a stable market, appears to offer vast potential.
Japan may develop further into a market for processed product, particularly for panel products, while continuing to import a moderate volume of logs.
New Zealand sawmillers may find their best opportunities in South-east Asia, Thailand, Philippines and Malaysia. Some high-quality timber should continue to be exported to the United States. Market-trading countries such as China-Taipei, Hong Kong and Singapore are likely to continue to purchase a range of New Zealand wood products.
The pulp and paper sector is likely to become increasing focused on Australasia with only the Asian-owned pulp companies exporting beyond these bounds. This focus is likely to see a marked decline in New Zealand’s imports of paper and consequently in total forestry imports.
New Zealand’s roles in global forestry can be broadly summarized in four categories:
- as already discussed, at an industrial level New Zealand is a net exporter of forestry products;
- in global forestry debates New Zealand is a small and generally moderate country regarded by most as having few “axes to grind”. Its primary contribution is often as an arbiter or conciliator, seeking ways to progress deadlocks between more protagonist countries. New Zealand’s primary concern is to ensure plantation forestry, as practised in New Zealand, continues to internationally be accepted as a means of achieving environmental objectives;
- as described in the introduction New Zealand provides a “model” for a range of topical policies including plantation forestry and privatization;
- in the South Pacific New Zealand is a substantial source of development funding. New Zealand’s bilateral assistance on forestry is provided in response to specific requests from partner governments on the basis of their national and regional plans and priorities. Bilateral assistance is directed primarily to the island states of the South Pacific. New Zealand participates in projects by contributing technical assistance, cash grants, material supplies, and training. Currently New Zealand is associated with overseas development assistance in seven Pacific Island Developing Countries.
