4. Price trends: 1993 - 2001
The indicative stumpage figures (return to the forest owner) below are based on average harvesting and transport costs of $90 per cubic metre for ground based harvesting and $140 per cubic metre for aerial harvesting. The aerial harvesting cost is inclusive of savings on in-forest roading associated with helicopter harvesting, of about $10 per cubic metre. Stumpage values given below are averages based on information provided by forest owners and contractors and apply to sawlogs only.
Wholesale timber prices have been sourced from current timber merchant price lists for sales either exceeding 1 cubic metre or in pack lots.
4.1 Rimu
Between 1993 and 1996, when the Transitional Provisions of Part IIIA of the Forests Act were in force, rimu prices were constrained by mills with "allowable cuts" being in a position to dictate price to landowners who chose to undertake unsustainable harvests during the transitional period. At this time most of the rimu harvested was being sold to sawmills (or to forest contractors with access to mills with allowable cuts) for as little as $50 per cubic metre on stump. This was equivalent to a "mill door" price of about $150 per cubic metre. Since that time mill door log prices have increased to an average of about $325 per cubic metre in 2000 and $375 per cubic metre in 2001 ($317/m3 in 1999; Levack and Collins, 2000; mill door sales up to $500 per cubic metre have been reported in 2001.). This translates to a return to the forest owner (stumpage) of about $285 per cubic metre for ground based harvesting and $235 per cubic metre for aerial harvesting.
The limited supply of rimu is in demand by furniture manufacturers. With the imminent cessation of management of the Crown's indigenous production forests on the West Coast there will inevitably be substitution for rimu where manufacturers are unable to source sufficient and continuous supplies (some manufacturers are already replacing rimu with NZ beech and imported timbers such as European beech and white oak). There is likely to be increased pressure on supply and price, but only to the extent that rimu prices remain competitive with other comparable domestic or imported timbers.
The current wholesale price for Heart Dressing A rimu timber is about $2 300 per cubic metre (based on 100 x 40mm sawn timber dimension).
4.2 Beech
In 1993 the bulk of the beech timber supplied to the NZ and Australian markets came from 1906 SILNA land (Southland silver beech). The approved harvest from privately owned beech forests subject to approved SFM Plans is approaching 50 000 cubic metres per annum (total roundwood). Many of these forests have not been in full production, partly because of the lack of profitable markets. Developments in the industry are positive and it is likely that a continuous supply of beech will be marketed from 2002 from a number of forests in both the North and South Islands.
Southland silver beech sawlog prices have risen from about $75 per cubic metre at mill door in the mid 1990's to between $100 and $250 per cubic metre depending on quality and individual sales (average $175/m3). Anecdotal information on recent sales indicates that Southland silver beech is achieving a stumpage (all sawlog grades) of about $60 per cubic metre (ground based harvesting). There appears to be a wider range of values in evidence for beech compared with rimu and tawa, probably attributable to variability in sawlog quality.
Current sales of red and silver beech sawlogs elsewhere in the South Island average $215 per cubic metre. Overall the average at mill price for beech sawlogs is about $200 per cubic metre, indicating a current stumpage value of about $110 per cubic metre for ground based harvesting and $60 per cubic metre for aerial harvesting.
The current wholesale price for Dressing A beech timber is about $1 400 per cubic metre.
4.3 Tawa
Tawa was formerly used for a variety of purposes, including T & G flooring, utility products (handles), kitchen joinery, furniture and for interior timber detailing (skirtings, clashings etc). While recent production of tawa has been limited, some North Island manufacturers are investigating possible sources of tawa for production of high quality furniture.
Like rimu and beech, tawa log prices have improved since 1993, with mill door sawlog prices moving from $75 to $225 per cubic metre. This equates to a current stumpage of about $135 per cubic metre for ground based harvesting and $85 per cubic metre for aerial harvesting.
The current wholesale price for clean white tawa is about $1 650 per cubic metre.
4.4 Future Price Trends
Levack and Collins suggest that the correlation between supply and price of rimu from 1991 to 1999 is weak. However this statement does not appear to be consistent with some of the prices achieved in 2001. Given that the supply of rimu sawlogs is set to fall to
10 000 m3 or less in 2002, the likelihood is that there will be a significant increase in substitution for rimu by alternative species. This may moderate demand and further pressure for price increases. Red and silver beech are being sourced from available supplies and some manufacturers of high quality furniture are investigating opportunities for accessing beech and tawa to maintain production levels.
Prices for beech and rimu are unlikely to rise beyond the cost of presently available imported substitutes (e.g. European beech and salu salu respectively). Levack and Collins indicate there is price parity between salu salu and rimu. This, coupled with the imminent reduction in supply and the inevitability of substitution for rimu, is likely to "temper any further increases in rimu price". There has however been a significant rise in rimu sawlog prices since 2000.
The price for the best grades of NZ beech is less than European beech; the latter is priced equivalent to rimu and has an international reputation for quality. There could be sufficient demand to push prices for NZ beech further in the short term but increasing availability of NZ beech and the price of substitutes may be moderating factors.
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