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What is the Forest Datasheet? The Forest Datasheet is a regular update of market changes within the NZ forest industry. It’s designed to assist owners of private forests gain a snapshot of factors that could impact on the value of their trees.

Woodmetrics produces the Forest Datasheet. Woodmetrics is a Carter Holt Harvey business that provides private forest owners with a sale management service that maximises sale price and minimises sale risks.

This includes conducting all pre sale work such as resource consents, roading, inventory etc and then marketing a grower’s trees through a transparent competitive tender process. This returns on average 15% more compared to a grower selling direct.

Summary
Joint Export Marketing Initiative Stumbles
The Pressure on Exports
Pruned Log Prices
Sawlog
Pulp
Certification

Fletcher Challenge Forests have withdrawn from discussions with Carter Holt Harvey on their involvement in a joint marketing structure for NZ radiata pine. The CHH-proposed initiative had sought to establish a single desk marketing team to develop and manage the export radiata market.

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NZ exporters have suffered a series of setbacks in recent months as a result of rising exchange rates (US$ now at 0.54) and freight costs. The strength of the Kiwi owes much to an economy which is performing well, has higher interest rates (than the USA) and is not significantly at risk should a war occur in the Middle East. Freight rates have been affected by a shift in shipping capacity to the Atlantic and increases in bunker oil prices fueled by speculation about the possibility of war.

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Pressure is expected to come onto NZ$ pruned log prices in New Zealand with US lumber returns falling. Two key factors here are the NZ$ exchange rate and the availability of some significant volumes of fire damaged ponderosa pine on the US west coast. Ponderosa is a preferred species for interior use lumber so its increased availability has seen a demand shift away from radiata.

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Domestic sawlog prices have held firm with strong local demand for structural lumber, particularly in the booming Auckland construction market, keeping prices where they were before the late 2002 export log price slump. Low levels of S grade supply have assisted log traders resist any downwards price pressure.

Export prices negotiated in January are up slightly on December. Some companies have reported US$3 – 4 JAS m3 increases in Korea, for small volumes. These have not been occasioned by any real demand increase but are an agreed offset to the improved NZ exchange rate.

Exporters are all committed to significant price increases for February and March to try to recover some of the ground lost due to exchange rate movements, so are not settling much business in the short term.
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Pulp log prices remain low with levels of supply in most grades exceeding local demand.
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Pressure is being applied to NZ lumber exporters to get FSC accreditation. Leading this push is US mega-company Home Depot, who want to get chain of custody accreditation (FSC) on all of their lumber products.

The downhill momentum of such a move will see the certification blow-torch applied to forest owners eventually, although many already are certified or in the process of being so. Smaller forest owners can achieve certification, providing they meet the standards, by becoming a member of an FSC group scheme, like that established by PF Olsen.

Certification may not necessarily gain a price premium for the forest owner, but until at least 70% of the NZ forest industry are certified it may be the difference between selling your forest and having to watch the trees grow.

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