Leaf fossils discovered high in Australia's Snowy Mountains have revealed a past history of warmer rainforest vegetation and a lack of snow, in contrast with the alpine vegetation and winter snow-covered slopes of today.
On 5 September 2018, the California Air Resources Board released a draft California Tropical Forest Standard. A 191-page Draft Environmental Analysis was released on 14 September 2018. A public meeting will take place on 15 November 2018, and the California Air Resources Board is inviting comments on the Environmental Analysis before 5 pm on 29 […]
Saving lives happens in emergencies but also over the long term. Researchers are calling for sustainable environmental management to better support refugees and host communities alike Although very often safety comes first in the choice of places...
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Plantations that follow NGP principles are part of the solution ? to restoring nature, to enabling sustainable development, and to combating climate change. This is a message we want to spread further, and we are excited this year to hold our annual Encounter alongside the 4th International Congress on Planted Forests in Beijing. This review takes a closer look at these topics, as we seek to further develop the solutions plantations can provide.
Metsä Group’s innovation company Metsä Spring and Japanese Itochu Corporation have established a joint venture, which invests approximately EUR 40 million in building and operating a test plant, with the aim to demonstrate a new technology for converting paper-grade pulp into textile fibres. Source: Timberbiz Business Finland, a Finnish governmental funding agency, will participate in the financing of the demo project with an R&D loan. The textile fibre demo plant will be located next to Metsä Group’s bioproduct mill in Äänekoski, Finland. Construction of the demo plant, with an annual capacity of about 500 tonnes, begins in October 2018 and it is planned to be started up in late 2019. ”With the plant, and the demonstration project related to it, we aim to prove the technical feasibility of the new textile fibre production technology. “Based on the results of the demonstration project, we can then evaluate the technical and economic realities of building a clearly larger plant in Finland in the future. “During the demonstration project, which is expected to last two to three years from the start-up of the plant, we will also gather customer feedback related to the new fibres,” CEO of Metsä Spring Niklas von Weymarn said. The new technology to be studied and developed in the demo project is based on direct dissolution using a novel solvent for the pulp dissolution stage. Metsä Group’s wet paper-grade pulp will be used as the raw material. The new technology is estimated to be more environmentally-friendly than the textile fibre production technologies currently in use. The basis for the new technology has been developed in joint research programs, starting in 2009. The main collaborators, in terms of development of the technology, include Aalto University, University of Helsinki, VTT Technical Research Centre of Finland and TITK from Germany.
Marking the beginning of a 5-year education plan for the East Anglia Timber Trade Association (EATTA), three key university lecturers from the Eastern region travelled to Sweden to update their knowledge of today’s timber production. Source: Timberbiz The visit was arranged by EATTA as part of its new ‘Who teaches the teachers?’ program and hosted by the Industrial Solutions operations of Timber Trade Federation member SCA Wood. The three-day trip involved visits to: SCA’s tree nursery where 100 million tree seedlings are produced each year; SCA’s sustainable forests, of which SCA owns 2.6 million hectares in northern Sweden; and Tunadal Sawmill – one of 5 sawmills owned by SCA in Sweden. “We were delighted to be asked to host this visit by the EATTA. SCA has always been dedicated to sharing our wealth of timber knowledge with our customers, but the education we provide shouldn’t stop there,” Stephen King, Sales Director of SCA Wood Industrial Solutions said. “We are firmly rooting our commitment to the timber industry to help engage those responsible for inspiring the engineers and architects of tomorrow. Seeing our operations first-hand will hopefully provide lecturers with the experiential knowledge they need to impart enthusiasm for wood use in construction to the next generation.” The lecturers came from both architectural and engineering disciplines, from the University of Hertfordshire, Anglia Ruskin University and the University of Suffolk. “The aim is for each lecturer to enliven students’ and colleagues’ interest in the timber business and in timber as a sustainable building material,” EATTA Chairman Chris James of Nason Davis said. “Through such visits, we can get our industry’s message across directly to the specifiers and architects of the future. These three lecturers alone enable us to reach over 300 students, broadening their knowledge and increasing enthusiasm for wood amongst those teaching engineering and architecture. “Over five years we could potentially see 1500 new specifiers favouring timber and wood products as a result of this initiative,” Chris James said. Architectural and engineering students and lecturers across the Universities of Anglia Ruskin, Suffolk and Hertfordshire will undoubtedly benefit from this first-hand knowledge. EATTA plans to repeat the process for the next five years until all the lecturers in the Eastern region have either visited or heard from colleagues about the operations.
Timber Expo is an annual trade show in the UK, covering a breadth of timber applications from timber frame, sawmills, merchants, glulam, SIPs, CLT, fixings and fastenings, timber cladding, doors/windows, mouldings, skirtings and flooring. Source: Timberbiz Timber Expo is supported by industry associations including TRADA, STTC, BMF, RIBA, CIAT and NaCSBA where trade visitors can gather under one roof to discover the latest products, innovations and developments across the timber sector – not just from the UK but from an increasingly exciting and diverse international market. Taking place at Birmingham’s NEC, Timber Expo unites more than 100 exhibitors with an audience of more than 30,000 industry professionals as part of UK Construction Week. UK Construction Week consists of nine shows under one roof, Timber Expo, Building Tech Live, Build Show, Civils Expo, Energy, HVAC, Plant & Machinery Live, Surface Materials Show and Grand Designs Live. The Timber Expo will take place on three days from Tuesday 9 October to Thursday 11 October 2018 in Birmingham.
South Australia’s forestry industry is invited to get involved in a new survey aimed at unlocking productivity and efficiency benefits by identifying road transport improvements. Source: Timberbiz The Improving Road Transport for Forestry Project aims to uncover the obstacles to road freight productivity along the forestry supply chain, including the movement of machinery, in all production areas of the state. Minister for Primary Industries and Regional Development Tim Whetstone said he wanted to hear from industry to understand what could be done to help improve productivity. “The forestry industry is an important sector for South Australia, with the sale of goods and services worth $2.3 billion each year for the state,” said Minster Whetstone. “We are calling on the forest industry to take part in the survey. We want to know what the challenges are and what the sector believes are the possible areas for improvements, such as permit changes or junction upgrades. “This project is about generating new ideas and possible solutions to promote the forestry industry’s growth, productivity and competitiveness. Minister for Transport, Infrastructure and Local Government Stephan Knoll said the project seeks to make road transport safer. “The project is about making road transport simpler, safer and identify productivity gains within the forestry industry,” said Minister Knoll. “Strategic road upgrades will improve conditions for heavy vehicles and allow them to navigate via more efficient routes across the state.” The project is a partnership between PIRSA, Primary Producers SA, and the Department of Transport, Planning and Infrastructure. Access the survey, which is open until 2 November 2018, at www.pir.sa.gov.au/forestrytransport
Whanganui iwi have been offered an opportunity to harvest carbon credits off waste or unproductive land if it becomes permanent forest. Source: New Zealand Herald On September 28 the new Māori Carbon Foundation held a meeting at Cooks Gardens Function Centre to outline its proposal. About 40 people were there to hear it. On suitable land the foundation is offering to establish, maintain and insure a forest at its own cost. It would pay for this by cashing in the carbon credits (NZUs) for the first seven years. From year seven until year 30 the forest’s NZUs would be split 50:50 with the Māori owners. After that the foundation’s carbon and forestry rights would be ended and the owners would get all the NZUs. Each hectare of average forest could earn NZ$10,000-worth of NZUs over 30 years. Iwi and hapū would continue to own the land and be able to access it. The forest would be permanent, perhaps reverting to native species. The proposal was outlined by Sir Mark Solomon, who chaired the financially successful Te Rūnanga o Ngāi Tahu until 2016. He said Māori set it up in order to have their voice heard in this new climate change/carbon price/billion trees era. The foundation was launched on September 17, and is touring 20 New Zealand centres to make its offer to Māori. It got good crowds in Kaitaia, Kaikohe and Wairoa. Whanganui was its seventh stop. It has backers with “megabucks” to fund the scheme, Solomon. It will get expert advice from a New Zealand owned private business – New Zealand Carbon Farming. The foundation has six directors, including managing director Jevan Goulter, who was in Whanganui in 2010, involved in a controversial Miss Wanganui competition and standing for mayor. Asked what land would be suitable for the forestry deal, Solomon said in order to be part of the Emissions Trading Scheme (ETS) and get NZUs it must have been unforested in 1990. The foundation was only interested in blocks of 40ha or more, and land that was otherwise unproductive would be best. “Some will want to do it on good productive lands. Personally, I’m not a fan of that concept,” he said. Trees planted could be a mixture of natives and exotic species like pinus radiata. But exotics store carbon faster, and are cheaper to buy and plant. “The money is in the exotics. If you have too high a mix of natives it becomes uneconomic.” He advocated planting natives along the waterways, and said the forest would improve water quality. The NZUs – currently worth NZ$25 each – would be sold to organisations needing to offset the carbon they emit by burning fossil fuels. The foundation is willing to help iwi create nurseries to grow the trees, and pay them to keep pests down, plant trees and maintain access. It has appointed Donna Awatere Huata as Māori Climate Commissioner. She’s a former activist and Act MP who was jailed for fraud in 2005, and has since had many other public roles. She said global warming would hurt Māori more than other peoples. She welcomed moves to lift the NZ$25 price cap on NZUs, because it will force polluters to pay the true price of their polluting. Dame Tariana Turia is the patron of the foundation’s Māori Carbon Social Trust. She got involved to make the foundation more trusted, and also because the forests could earn money that will help her people. “I want that investment to go into our whānau and hapū in things that will be really important for them. We don’t want to be forever in poverty. We want a resource that we can determine how it will be used,” she said. The proposal is “the greatest opportunity we have been given,” she said, and also probably the first scheme from Pākehā who are not looking to get something for themselves. One aspect was worrying her. “I have worried myself sick about the notion of growing pine trees. If we are looking for an opportunity to take us into the future, we do what we have to do,” she said. Hone Harawira said the proposal has been examined by banks and policy people, and at Parliament on September 27. “Not one of them has been able to find a flaw in this scheme.”
The Victorian Association of Forest Industries (VAFI) has welcomed reports of a commitment from the State Opposition to not establish the proposed Great Forest National Park (GFNP) if they win government in November. Source: Timberbiz Mr Tim Johnston, CEO of VAFI, said the confirmation on the proposed park made by the Opposition Leader Matthew Guy recently is a positive step for the timber and forestry industry in the state, and he looks forward to seeing the detailed policy platforms from the Coalition. “I am encouraged to see that the Coalition are clear on their policy towards the proposed GFNP, which if established would have devastating consequences for the industry, and a direct impact socially and economically for all of Victoria. “The timber and forestry industry brings in over $7.3 billion in sales and service income for the state of Victoria and employs some 20,000 workers directly, with thousands more employed through flow on activity,” he said. “We need security and certainty and we hope that this commitment will be one of many made to secure the future of the timber and forestry industry in Victoria.” Mr Johnston said that industry is committed to working constructively with all stakeholders, including eNGOs and Governments to maintain the balance between environmental considerations and the sustainable industry in Victoria. “We need forestry, tourism, and any other small industries to ensure a resilient and vibrant future for these communities and all Victorians,” he said. Already 94% of the State forest is unavailable or unsuitable for timber harvesting. Currently timber harvesting occurs in just 0.04% of the forest annually and harvested timber is replanted the following year.
HarvestTECH sold out in 2017 with more than 450 harvesting and wood transport contractors, harvest planners, forest managers and equipment and tech providers together in Rotorua, New Zealand. Source: Timberbiz In addition to having most harvesting contractors from throughout the country attending, the Forest Industry Engineering Association (FIEA) event drew in a large contingent of contractors and forest managers from throughout Australia, as well as attracting key equipment suppliers, researchers, forestry companies and international contractors from Europe, the US, Canada, Papua New Guinea and Asia. As well as the two-day conference and more than 40 displays, there were two one-day field tours This biennial event has now been scheduled for 26-27 June 2019, Rotorua New Zealand. Early details on the program can be found on the event website www.harvesttech.events Expressions of Interest to present at the harvesting event are being sought. If you are keen to speak at the conference and you are an early adopter, developer, innovator, contractor, technology or equipment supplier, service provider or researcher involved in wood harvesting operations, the FIEA would to hear from you. What’s being covered? Recent innovations in steep slope and winch assist harvesting Getting the best out of existing hauler & groundbased operations Harvest planning – new systems really making a difference Effective use of collected data from your harvesting operation Options for eliminating log sorts and reducing landing sizes Tools & Systems for harvesting smaller woodlots Remote sensing technologies for harvest planningand operations Solutions for improving in-forest communications – Increased automation and mechanisation – new R&D Remote control, robotics, virtual reality and automation in the bush Filling the skills gap in harvesting. Interested speakers or exhibitors – or others who’d like to look at building in visits, tours or meetings in and around this major harvesting event, please contact Brent Apthorp on +64 21 227 5177 or email firstname.lastname@example.org before Friday 19 October.
Every month, IndustryEdge publishes Wood Market Edge, Australia’s only forestry and wood products market and trade analysis, and supplies its customers with hundreds of unique data products, advisory and consulting services. Find out more at www.industryedge.com.au -3.4% – dwelling approvals in New South Wales totalled 70,169 over the year-ended July 2018, but for July itself were 20.1% lower than in July 2017 $137.3 million – the value of Australia’s imports of ‘Posts & Beams’ over the year-ended July 2018 was 31.5% higher than the prior year 11,920,676 – the number of items of wooden furniture imported to Australia over the year-ended July HARDWOOD – the value of hardwood chip exports in July 2018 was AUD114.7 million and more than AUD1.193 billion for the year-ended July, measured on a free-on-board basis AUD332.68/m3 – the free-on-board price of imported particleboard in July 2018 was 24.5% lower than a year earlier – despite the depreciation of the Australian dollar
The Mid North Coast of New South Wales could become home to the world’s first biorefinery turning sawmill residues into renewable diesel and renewable bitumen. Source: Timberbiz On behalf of the Australian Government, the Australian Renewable Energy Agency (ARENA) has announced up to $500,000 in funding to Boral Timber, a subsidiary of Boral Limited, to investigate the feasibility of building a ‘second-generation’ biofuels refinery using the waste sawmill residues from the Boral Timber Hardwood Sawmill at Herons Creek near Port Macquarie. Under the $1.2 million study, Boral will explore the technical and financial viability of establishing a biorefinery using innovative technology, which would be located near the Herons Creek sawmill. If the study is successful, the proposed biorefinery, which would cost an estimated $50 million to build, could convert up to 50,000 tonnes of waste sawmill residue produced each year into transport-grade renewable diesel and bitumen. The sawmill residue – which includes sawdust, remnant woodchips, shavings and offcuts – is currently used for lower value uses such as landscaping and boiler fuel. The study will consider a mechanical catalytic conversion technology, developed by Spanish-based Global Ecofuel Solutions SL, combined with the potential biorefinery at Herons Creek and will be the first time the process would be used in a production scale facility. ARENA CEO Ivor Frischknecht said the project further shows that big businesses are increasingly moving towards renewable energy solutions. “The transport sector is a significant user of energy in Australia, with liquid fuels a key long term energy source for heavy-vehicle road and air transport since they cannot readily be electrified. Bioenergy comprises a growing proportion of Australia’s energy mix, and this new technology could see residue from the production process be used to reduce Boral’s reliance on diesel and bitumen derived from fossil fuels,” he said. “If this ground-breaking technology is successful, we hope to see a transition to similar biorefineries by other companies which have a waste stream in forestry or agriculture,” Mr Frischknecht said. Boral Executive General Manager (Building Products) Wayne Manners said that if the feasibility study was successful, the transport-grade renewable diesel produced at the potential new biorefinery could eventually account for up to 15% of Boral’s annual diesel needs. Boral is one of the largest consumers of bitumen and has one of the largest truck fleets in Australia, using approximately 100 million litres of diesel each year. “The application of this technology has the potential to transform the way we use low value hardwood sawmill residues into a resource that could be highly valuable not just to Boral but to the industry more generally,” he said.
The NSW Government has opened round 1 of applications under the Forest Industries Innovation Fund loan scheme – a $34 million fund to assist industry in adopting new technology and innovative practices. Source: Timberbiz The scheme aims to attract projects that will better address the changing demands of the future forest industry in the state, providing long-term, low-interest loans up to $3 million for successful applications. NSW Department of Primary Industries (DPI) Group Director Forestry Policy, Research & Development Nick Milham said the scheme delivers on the government’s Forestry Industry Roadmap. “We’re pleased to have launched the initiative this week, which will drive improved profitability and innovation across the sector,” he said. “The loans can be accessed for up to 100% of the cost of a range of projects, meaning that quite substantial projects can be fully funded, but that even larger projects may also be supported. “This is a comprehensive package of investment in the industry that will underpin a sustainable industry for years to come, supporting regional jobs and communities.” Mr Milham said the scheme was designed and developed with strong guidance provided by stakeholders and industry. “The NSW Forest Industries Taskforce, which has broad membership from across the forestry and forest products sectors, has encouraged the NSW Government to consider measures that could be taken to assist the industry to address challenges and take advantage of emerging industry growth opportunities,” he said. The $34 million fund is part of the broader NSW Government 2018-19 Budget forest industries support package, totalling $71.8 million over four years. Including the innovation fund, other measures included: $24 million investment in plantations through Forestry Corporation NSW to increase supply; $9.2 million for world-class forest mapping and monitoring; and $4.6 million to support training and accreditation for forestry contractors. The Forest Industries Innovation Fund will be administered by the NSW Rural Assistance Authority under guidelines developed by the Department of Primary Industries (DPI) – Forestry. Applications close on 11 November 2018 and can be made online at www.raa.nsw.gov.au/forest-fund
The Economist Group announced it will contribute 0.5 percent of the amount it receives from advertisers featuring animals in the group’s publications to The Lion’s Share. The Lion’s Share will use the funding to support UNDP’s conservation initiatives, in line with SDG 14 and SDG 15.
A large-scale land purchase by an American forestry company west of Taupō will see 1148ha of farmland converted into a redwood forest.
The $7 million purchase north of Taumarunui, near Matiere, by The New Zealand Redwood Company was approved by the Overseas Investment Office in July.
The venture was likely to create six full-time jobs and increase New Zealand’s export returns because the bulk of the timber will be exported to the United States in a processed form, the OIO consent said.
Taupō-based NZRC was formed in 2001 by the Soper Wheeler Co of California, a 100-year-old forestry firm.
NZRC specialises in redwoods, which are the world’s tallest trees and are found naturally in a coastal strip in Oregon and California. It has so far planted 3000ha of redwood and intends to keep establishing forests in New Zealand.
In the US, these trees can grow to 110 metres and have an average lifespan of 600 years. However, they can survive for over 2000 years.
NZRC chief executive Simon Rapley said the company plans to plant redwoods on 650ha, retain the 270ha of native forest and leave the balance in pasture on the sheep-beef farm.
“We will plant over 400,000 trees on the property,” Rapley said in an emailed statement.
The trees will be harvested between 35 and 40 years of age and will almost certainly be processed locally.
It will take 100 workers for the log harvest and wood processing.
“The processed wood will most likely end up in California, which is the only existing market until other markets can be developed.”
Some of the wood will also be available for the domestic market.
“New Zealanders will have access to decorative, durable and dimensionally stable wood that is sustainably grown and has had 40 years of absorbing carbon dioxide out of the atmosphere,” he said.
Redwood is an “appearance wood” and is used for interior panelling, cladding, decks and fences.
The planting would also advance the Government’s plan to plant a billion trees over the next 10 years and create a walking access route across the land.
As of August 27, 60.055 million trees had been planted since the policy was announced and a further 67.475m seedlings had been sold for planting this year, according to the Ministry for Primary Industries.
Rapley said NZRC plans to create esplanades to provide public access along the Ōhura River, even though it’s unlikely people would want to fish on the river due to its high sediment load.
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This report by Harsh Choudhry and Glen O’Kelly for McKinsey & Company looks at which advanced technologies for forest management are most promising, and how forestry companies can start their digital transformation.
The authors argue that while digital technology is revolutionising industries around the globe – from manufacturing to healthcare to agriculture – forestry has lagged behind. However, this is finally starting to change. Choudry and O’Kelly report some forestry pioneers are starting to achieve productivity increases and returns on investment similar to other industries, and the size of these gains is comparable to the shift from animal-powered to mechanised processes.
Unfortunately, according to the authors, digital solutions in forestry management science currently confront a system that still operates largely on the basis of fundamentals developed by Hans Carl von Carlowitz more than 300 years ago.
However, inspired by advances in agriculture, some forestry operators have begun pioneering the use of advanced technologies to improve forest management results. Within the industry, this approach is widely called ‘precision forestry’. Precision forestry is enabled by a wide range of emerging technologies, such as drones or unmanned aerial vehicles (UAVs), laser scanning (lidar), and soil sensors.
But precision forestry is not simply the adoption of digital technologies. For forest managers, it involves a paradigm shift from a highly manual and analog system with broad-brush management prescriptions, to a system with digital data capture and planning, granular management prescriptions and tight operational control.
Each of the precision forestry technologies offers improvements to forest management through one or a combination of four ways:
- Tighter control of operations with improved data collection.
- Increased selectivity of prescriptions to match site and needs, for instance, soil nutrients and the genetic material of seedlings planted.
- Automation of operations, from nurseries to wood logistics.
- Optimised decision-making with advanced analytics.
The report details 15 precision forestry technologies or practices the authors believe show the greatest promise to transform operations and improve forest management results.
Choudry and O’Kelly found that many leading forestry companies globally are adopting precision forestry technologies and there has been a noticeable proliferation of technology suppliers seeking to develop this space. While many precision forestry technologies remain in trial phases, some are already established and increasingly gaining traction. The availability of these technologies, even of those being trialled, signals a major shift in the industry.
The authors advise that the key to capturing the potential value will be a holistic digital transformation that brings together the disparate applications of new technologies. They say companies will need an end-to-end digital transformation in terms of the four Ds:
- Discover – understand where you are and where you want to go, create a road map.
- Design – design and deliver first at small scale on limited projects and/or single site.
- Deliver – deliver at a larger scale with a broader project portfolio, potentially at all sites.
- De-risk – implement structure to reduce operational and financial risk over the long term.
In addition, they offer these five practical pointers to ensure a company is well aligned at the start of its precision forestry digital transformation:
- Start now, don’t wait for the technology to fully mature. For instance, use manual reading of UAV images while algorithms are being built. This helps narrow down the exact problems to solve and the requirements for doing so.
- Begin with your business needs. Many precision forestry technologies are used for data collection, which is only the starting point and should be followed by analytics, and only then decision-making.
- Combine technologies to address specific problems. The new technologies are most powerful when used in combination. For instance, for forest re-establishment, use UAVs to collect stocking data, analysis to identify low stocking hot spots, and decision-making to prioritise areas to replant.
- Make the best of use of existing data. This, if cleaned and integrated into one unified data set, may be enough in itself to run predictive analytics and drive improved decision-making.
- Consider the full set of enablers. Don’t look at just the new technologies – consider the IT backbone, business processes, capabilities, and organisational setup as well.
The report concludes: “The advent of these new tools and capabilities offers potential beyond raising the efficiency of practices handed down from the 18th century. It heralds the start of a revolution in how we manage the health and the performance of the world’s forests.”
The full report is available online.
Source: FWPA R&D Works
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The NSW Government are funding new innovative forestry projects aimed at improving profitability, opening up new local and international markets, and preparing for future opportunities. Minister for Lands and Forestry Paul Toole said applications would soon open for the first round of the AU$34 million Forest Industries Innovation Fund.
“As part of the 2018-19 Budget, I announced an AU$71.8 million forestry package across four years, aimed at supporting the industry and keeping jobs in our regions,” Mr Toole said. “The Innovation Fund will provide loans of up to AU$3 million for a range of projects such as timber mill infrastructure upgrades, development of new products, or initiatives that open new markets.
“We want to see industry take control of their future and develop new programs that support their local businesses. “The AU$2.4 billion NSW forest and wood product industry is an economic driver for the regions and I am pleased to be delivering this support for jobs.”
Applications will be open for six weeks from 1 October, with successful projects able to access concessional loans of 2.5 per cent for up to 20 years. The Forest Industries Innovation Fund supports the objectives of the NSW Forestry Industry Roadmap and will be administered by the Rural Assistance Authority.
Eligibility guidelines, application form and other information will be available on the RAA website ( www.raa.nsw.gov.au) from 1 October.
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New Zealand’s export log market took a hit from the trade dispute between the US and China as the declining value of the yuan crimps the buying power of the country’s largest log market.
The average price for New Zealand A-grade export logs dropped to US$133/JAS from US$141/JAS in August, and US$145/JAS in July, and is now the lowest since June 2017, according to AgriHQ’s Forestry Market Report for September.
“The Chinese log market has again dominated talk in the NZ forestry industry amid its sudden depreciation these past two months. Purely from a data perspective August and early September don’t make for pretty reading,” AgriHQ analyst Reece Brick said in his report. “All of this weakness is directly related to the reduction in Chinese buying power, itself due to the depreciation of the CNY:USD.”
The yuan has depreciated 7.5 percent since mid-June, recently trading at 6.8763 per US dollar. Still, Brick said that despite the fall, market sentiment has stayed “quite positive” as factors such as port-level inventories, offtake rates and shipping rates otherwise point towards healthy fundamentals for New Zealand log trading in China.
“Consensus among the majority of traders is that we’ve settled at the bottom of the market for at least the time being,” he said. Chinese demand for New Zealand logs has been strong over recent years after Asia’s largest economy clamped down on the harvesting of its own forests and reduced tariffs on imported logs to meet demand in its local market. However, trade tensions between the US and China have dented the value of the Chinese currency and traders fear rising tariffs will hurt economic growth and dampen demand.
“What the future looks like will largely be dictated by the actions of the Trump administration,” Brick said. “The latest round of 10 percent tariffs covering US$200 billion of Chinese products is yet to be felt within the log industry. The main headache, however, is that there’s no end in sight for the trade war. It’s expected the latest tariffs will be lifted to 25 percent by Christmas, while Trump has threatened to extend these tariffs to another US$267 billion worth of Chinese products.
“Given log demand is so closely tied to economic growth, we can only hope these two power-houses can settle their differences sooner rather than later. Just don’t count on it,” he said.
Brick noted that neither India nor South Korea, New Zealand’s other major log markets, have provided any significant relief for exporters either. However, he noted the weaker New Zealand exchange rate against the US dollar had offered some protection for local export traders against the depreciation within China.
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