Foresters are saying that log supply to domestic and export markets is inextricably linked and can’t be separated, as Forests Minister Shane Jones now seems to be advocating. Forest Owners Association President Phil Taylor says a harvest of just about any forest will produce higher grade logs for domestic construction, some logs for export and some lower value wood which is only suitable for domestic chipping. Source: Timberbiz
NZ Forestry Minister Shane Jones has been reportedly considering levies on log exports to fund a type of resetting of the local industry, or a variety of regulations to ensure domestic lumber processors have their needs met before exporters.
This follows a call, in early April this year from union leader Maurice Davis to introduce forestry export quotas and regulation.
“He needs to inform log exporters that Kiwi processing firms outrank their overseas appetites. NZ forest sector is too reliant on China. We need to look after Kiwi jobs and timber firms before we fuel the Shanghai Express,” Mr Davis said.
“I fear an avalanche of logs for short-term profit will disappear overseas to the detriment of Kiwi manufacturing and construction jobs. The old free market model of beggar thy neighbour is discredited.”
However, Mr Taylor said that you just can’t go in and cut down some parts of a tree to cater to one market without harvesting the whole tree for other markets too. That was clearly shown up when forest companies were unable to export earlier in the year and how difficult it physically was to keep our local mills supplied.
“It’s not true either that we send all our logs overseas. In most years, the majority of the export value of our forest products comes from added value categories, such as sawn timber and pulp and paper,” he said.
“About 15 million tonnes of logs a year are consumed by our domestic processors and this represents just under half of the total annual harvest from New Zealand’s forests. That has been remarkably consistent and a welcome market for us over the past twenty years.
“Of course, at the moment most of the industry is closed down in support of the government aim of ending the COVID-19 infection crisis. We have supported this measure,” he said.
“But the shut-down has meant we are getting increasing reports of tens of thousands of tonnes of logs left deteriorating on harvest sites and in yards around the country, which urgently need to be exported or processed before they are worth nothing.
“When we do get back to business, we’d welcome new infrastructure projects the government says it intends to generate to get the economy going. It would be tremendous if wood construction was a major part of that.
“It would also be great if some of these wood dependent projects could be in the regions. That would help those communities which grow, supply and process these logs. The forests are often in regions where other employment opportunities are generally scarce.
“We are concerned for the forestry workforce in our rural communities. They have felt the market effects of Covid- 19 right back to the beginning of this year, well before the shutdown began.
“Any restriction on exports has the potential to severely impact their well-being and that of their families.
“Shane Jones is talking about creating new jobs. We’d love to see those, but not if we fail to protect current ones.
“We need a sustainable domestic market for our logs in New Zealand, just as we need a healthy export market.”
The Chief Executive of the Forest Industry Contractors Association Prue Younger said that contractors as an industry sector will want to get back to work as quickly as possible, whether it be export logs or domestic processing.
“Both offer opportunity to return our contractors to financial viability,” she said. “Ultimate stability with the right product balance needs to be the medium-term vision where retention of a skilled workforce are seen pivotal in the supply chain. Otherwise once again they hold the greatest risk as has become apparent through recent episodes of low log prices and the COVID19 crisis.”
Mr Taylor said that if the export market was restricted it would most likely mean that less timber would be available locally. The Farm Forestry Association shares Phil Taylor’s concerns. President, Hamish Levack says he doesn’t know what Shane Jones is actually proposing.
“If the government introduced compulsory acquisition at low prices for instance, then I suspect most farm foresters, because they are not going to harvest at a loss, would shut up their woodlots and wait for a change of government. Our sector represents 40% of the currently harvestable trees,” Mr Levack said.
Mr Taylor said that he doesn’t think some iwi would be very pleased either.
“That is something of course that they might wish to speak for themselves about. Land owned by iwi which is growing commercial forests on it represents another 40% of the New Zealand forest estate, and Māori outside of the iwi estates own forests in their own right too.”
He said that the industry has also been pushing for the Labour led government to fulfil its election promise of a wood preference policy in construction.
“Ever since the government was elected, we have been trying to get Labour to prioritise New Zealand wood use over high carbon emission materials, such as mostly imported from overseas steel and concrete. It hasn’t happened unfortunately,” Mr Taylor said.
“We would hardly be pushing for this policy if we wanted to keep logs for export.
“If the policy had come in during 2017, when it should have, we’d be well on the way of using a New Zealand grown resource being available for New Zealand workers to construct with when the COVID-19 lockdown ends.
“As it is, it will take years to grow New Zealand timber processing, while our immediate need will be many jobs to be available when the lockdown ends.
“Right now, we cannot afford to take an everyone for themselves approach. It is even more important than ever for all parts of our supply chain work together which can deliver solutions that are the best for all.”
