Forestry production and trade for the June 2006 quarter1
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Overview
The promising signs for the forestry industry noted last quarter continued during the June 2006 quarter. The New Zealand dollar fell 8.1 percent during the June 2006 quarter, according to the Reserve Bank's Trade Weighted Index (RBNZ website). In addition, domestic log prices increased around 5 percent, and export prices for A, K and pulp log grades continued to improve. The continued fall in pruned export log prices, a shortage of skilled labour and high energy costs continue to concern the sector.
Production
The main changes between the March 2006 quarter and the June 2006 quarter were increases in roundwood removals and the production of sawn timber, wood pulp, fibreboard and veneer.
Roundwood
June 2006 quarter roundwood removals were up 17.4 percent to 4 903 000 cubic metres on the March 2006 quarter, at similar levels to the June 2005 quarter. The biggest contributor to this increase was the volume of logs and poles exported, up 10.3 percent. These figures suggest that improved market conditions are beginning to impact on the sector.
Sawn timber
Production of sawn timber in the June 2006 quarter was up on the March 2006 quarter (10.9 percent) to 1 075 000 cubic metres. March quarter production is usually low because of the number of holidays during the period.
Compared with the June 2005 quarter, production of sawn timber in the June 2006 quarter was down 4.6 percent. The provisional June 2006 year end figure was also down (4.4 percent) on the June 2005 year figure. This is due to the strength of the New Zealand dollar over the previous two years. While the New Zealand dollar has been falling since the beginning of the year, a number of mills closed or scaled back production over the previous 12 months due to poor returns. In June 2006 the New Zealand dollar averaged 61.9 cents US, the lowest monthly average since May 2004 (Reserve Bank of New Zealand exchange rate series). If the New Zealand dollar falls as expected, we will see improved returns to producers and a continued recovery in sawn timber production over the coming months.
Wood pulp
In the June 2006 quarter wood pulp production rose 6.2 percent on the March 2006 quarter volume to 379 000 tonnes. This was caused in part by low production in the March 2006 quarter, usual for a March quarter.
Production in the June 2006 quarter was down 3.2 percent compared with the June 2005 quarter. High electricity prices were stated as a factor contributing to lower production by the mills in the MAF quarterly survey of pulp, paper and paperboard mills.
Fibreboard
Thevolume of fibreboard produced in New Zealand rose 7.7 percent in the June 2006 quarter, with all fibreboard mills recording increases on March 2006 volumes. An increase in the June quarter is normal given the yearly production cycle for wood products.
On an annual basis, June 2006 quarter production rose 8.4 percent compared with the June 2005 quarter.
Veneer
Veneer production in the June 2006 quarter was up 4.9 percent on March 2006 quarter volumes. However, production of veneer for the June 2006 quarter was down 10.4 percent on the previous June quarter. In the year to June 2006 one of the mills suspended production due to unfavourable market conditions. The rest of the annual decrease in production was due to higher than usual production at one of the veneer mills during the June 2005 quarter.
Production cycles
Production Production of most products in the June 2006 quarter was higher than in the March 2006 quarter. March quarter production is usually low because statutory holidays and the Christmas break reduce the number of working days in the quarter. A number of mills also plan shutdowns for annual maintenance during the March quarter.
Quarterly production of most products showed little change between the June 2005 and the June 2006 quarters, with three exceptions. As discussed above, fibreboard production increased 8.4 percent, while veneer production decreased 10.4 percent. Particleboard production decreased 11.3 percent due to a three-week mill closure to upgrade plant.
Table 1: Production volumes
| June 2006 quarter (000) |
Change from March 2006 quarter (%) |
Change from June 2005 quarter (%) |
June 2006 Year (%) |
Change from June 2005 Year (%) |
|
|---|---|---|---|---|---|
| Roundwood (m3) | 4 903 | 17.4 | -0.7 | 18 944 | -1.7 |
| Sawn timber (m3) | 1 075 | 10.9 | -4.6 | 4 196 | -4.4 |
| Wood pulp (t) | 379 | 6.2 | -3.2 | 1 551 | -2.6 |
| Paper (t) | 233 | 1.0 | -1.7 | 937 | 0.4 |
| Fibreboard (m3) | 236 | 7.7 | 8.4 | 917 | 8.8 |
| Veneer (m3) | 166 | 4.9 | -10.4 | 650 | -8.1 |
| Plywood (m3) | 102 | 12.2 | -5.4 | 392 | -6.7 |
| Particleboard (m3) | 59 | 15.2 | -11.3 | 235 | 2.2 |
Exports2
Due to improved market conditions, the volume of forestry products exported in the June 2006 quarter exceeded exports during the March 2006 quarter for all products (for which volumes are available) except wood pulp and plywood.
The most significant factor in the increase in roundwood removals (up 17.4
percent) in the June 2006 quarter, was the increase in exports of logs and
poles. Sawn timber exports also increased in the June 2006 quarter, further
evidence that improved market conditions are beginning to impact on the sector.
The value of exports of forestry products for the June 2006 year was up slightly
(0.5 percent) on the June 2005 year. Export volumes (as calculated in roundwood
equivalents) for the June 2006 and June 2005 years were almost identical (13.2
million cubic metres).
The quarterly figures suggest that the falling exchange rate is beginning to drive an export recovery. However, it is generally recognised that there can be an 18-month lag between weak currency figures and improved export performance (National Bank of New Zealand Quarterly Economic Forecasts June 2006).
Logs and poles
The volume of logs and poles exported during the June 2006 quarter increased 47.8 percent, to 1.4 million cubic metres, restoring export volumes to levels seen in the December 2005 quarter. Logs and poles exports for the June 2006 quarter were valued at NZ$142 million, up 53.5 percent on the March 2006 quarter, and up 27.0 percent on the June 2005 quarter.
Export volumes for logs and poles to New Zealand's three main markets all recovered in the June 2006 quarter. Export volumes to Korea rose 65.6 percent (to 818 000 cubic metres), while volumes to China rose 31.9 percent (to 212 000 cubic metres) and volumes to Japan increased 11.7 percent (to 207 000 cubic metres).
Export volumes of logs and poles for the year ended June 2006 increased 2.4 percent compared with the year ended June 2005, while values increased 20.2 percent. These figures are a result of the improved New Zealand dollar log prices over the past year. The four quarter average for June 2006 is up three dollars on June 2005 and is at its highest level since March 2004 (MAF log price series). The values reported here are free on board prices, which include transport costs to the port. Rising oil prices have also had an upward effect on these values. Improved export log prices are beginning to increase volumes exported, although high shipping costs continue to generate low business confidence within the forestry sector.
Wood pulp
Wood pulp export volumes fell 26.4 percent in the June 2006 quarter, to 163 000 tonnes. The value of wood pulp exports also fell over the quarter, down 12.9 percent to NZ$116 million. In the global market, pulp prices have maintained growth during the June 2006 quarter. The fall in export volumes recorded for the quarter is partly due to reduced production by mills exporting pulp, as high energy costs impact. Mechanical wood pulp stocks are higher in the June 2006 quarter than in the previous quarter, indicating shipping timetables may also have contributed to the fall in exports during the June 2006 quarter.
Wood pulp exports for the June 2006 year were down 7.3 percent in volume and 1.0 percent in value compared with the June 2005 year. The largest contribution to the decrease in volume was a fall in exports of mechanical wood pulp to New Zealand's largest market, Japan (down 21.8 percent to 196 000 tonnes). In addition, the mechanical pulp component of wood pulp exports to China fell 52.0 percent to 54 000 tonnes.
Fibreboard
Fibreboard export volumes were 183 000 cubic metres in the June 2006 quarter, down 3.6 percent on the March 2006 quarter. However, the value of fibreboard exports rose 12.0 percent to NZ$66 million over the same period. Compared with the June 2005 year, fibreboard exports for the June 2006 year were up 9.7 percent in volume and 9.1 percent in value.
Table 2: Quarterly export volumes
| June 2006 quarter (000) |
Change from March 2006 quarter (%) |
Change from June 2005 quarter (%) |
|
|---|---|---|---|
| Logs and poles (m3) | 1 427 | 47.8 | 10.3 |
| Sawn timber (m3) | 484 | 19.5 | 3.3 |
| Pulp (t) | 163 | -26.4 | -26.6 |
| Fibreboard (m3) | 183 | 3.6 | 9.6 |
| Plywood (m3) | 13 | -40.0 | -56.0 |
| Particleboard (m3) | 26 | 20.9 | -19.1 |
Table 3: Quarterly export values
| June 2006 quarter (NZ$ 000) |
Change from March 2006 quarter (%) |
Change from June 2005 quarter (%) |
|
|---|---|---|---|
| Logs and poles (m3) | 141 779 | 53.5 | 27.0 |
| Sawn timber (m3) | 211 753 | 32.4 | 14.1 |
| Pulp (t) | 115 585 | -12.9 | -4.2 |
| Fibreboard (m3) | 66 439 | 12.0 | 16.5 |
| Plywood (m3) | 23 743 | -27.5 | -36.7 |
| Particleboard (m3) | 10 997 | -12.6 | -42.2 |
Table 4: Annual exports
| Export volume | Export value | |||
|---|---|---|---|---|
| June 2006 year (000) |
Change from June 2005 year (%) |
June 2006 year (NZ$ 000) |
Change from June 2005 year (%) |
|
| Logs and poles (m3) | 5 200 | 2.4 | 476 493 | 20.2 |
| Sawn timber (m3) | 1 834 | -0.1 | 745 921 | -4.5 |
| Pulp | 795 | -7.3 | 472 867 | -1.0 |
| Paper and paperboard | 661 | 2.9 | 537 228 | 3.9 |
| Panel products (m3) | 1 055 | 0.2 | 482 017 | -15.2 |
| Other forestry products | - | - | 485 241 | 9.5 |
| Total exports | - | - | 3 199 767 | 0.5 |
Imports3
The The value of forestry products imported for the June 2006 year increased 4.4 percent on the previous June year. Paper and paperboard, the dominant imported forestry product, also increased 3.2 percent by value.
The volume of panel products imported in the June 2006 year increased 58.2 percent on import volumes in the June 2005 year, to 40 521 cubic meters. Continued strength in the domestic housing market may have contributed to this rise. The relatively high New Zealand dollar has cushioned the rise in import values of panel products, which increased only 5.2 percent in the June 2006 year.
Table 5: Annual Imports
| Import volume | Import value | |||
|---|---|---|---|---|
| June 2006 year (000) |
Change from June 2005 year (%) |
June 2006 year NZ$ 000) |
Change from June 2005 year (%) |
|
| Logs and poles (m3) | 6.459 | 111.1 | 5 703 | 139.5 |
| Sawn timber (m3) | 53 945 | -3.0 | 57 259 | 0.8 |
| Pulp (t) | 6 104 | 79.7 | 6 799 | 83.4 |
| Paper and paperboard | 486 258 | -0.9 | 678 171 | 3.2 |
| Panel products (m3) | 40 521 | 58.2 | 34 198 | 5.2 |
| Furniture and furniture parts | - | - | 226 370 | 16.9 |
| Other forestry products | - | - | 380 880 | -0.9 |
| Total imports | - | - | 1 389 380 | 4.4 |
- All production figures in this release are provisional; all June 2006 trade figures are provisional.
- Export values are NZ$ free on board (f.o.b.) (the value of goods at New Zealand ports before export, includes cost of transport to port).
- Import values are the NZ$ cost of goods including insurance and freight to New Zealand (cif).
Published by the Ministry of Agriculture and Forestry
PO Box 2526, Wellington, New Zealand
Published 8 September 2006
Download accompanying tables as CVS Files
- Quarterly sawn timber prod [5KB CSV]
- Annual sawn timber prod [5KB CSV]
- Pulp production [5KB CSV]
- Paper and paperboard prod [5KB CSV]
- Panel production [30KB CSV]
- Roundwood removals [30KB CSV]
- Log exports [KB CSV]
- Hardwood chip exports [10KB CSV]
- Softwood chip exports [5KB CSV]
- Sawn timber exports [5KB CSV]
- Mechanical pulp exports [45KB CSV]
- Chemical pulp exports [10KB CSV]
- Fibreboard exports [10KB CSV]
- Plywood exports [5KB CSV]
- Particleboard exports [5KB CSV]
Contact for Enquiries
Monitoring and Evaluation
Innovation and Research Policy Directorate
Ministry of Agriculture and Forestry
Email: stats_info@maf.govt.nz
Phone: 64 4 894 0100
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