Growing demand good news for forestry industry

Forestry could be about to experience a dream run, according to Forest Owners chief executive David Rhodes.

The balance of international supply and demand appeared to be changing in favour of the owners of forest plantations, said Mr Rhodes, who has just attended a world forest and wood products conference in Tokyo reports Stuff.

"On the supply side, huge areas of natural forest across the globe are being protected in reserves and national parks. Also, the international pressure on illegal loggers is finally starting to tell – products from illegally logged and uncertified forests are becoming harder to sell," he said.

At the same time, consumer demand for renewable and recyclable products was growing.

And, ambitious bio-energy targets set by many countries were driving demand for wood pellets and other forest-based fuels.

New Zealand was already experiencing a surge in demand from China, which had lifted New Zealand annual log imports from one million tonnes three years ago to six million tonnes today.

A grade log prices had gone from US$85 (NZ$126) a tonne to a peak of US$150 two months ago before easing to US$130.

Latest official trade figures show that in the three months to April logs, wood, and wood articles were up $172 million on the same period the year before, (a rise of 31 per cent), mainly due to untreated pinus radiata logs, with both higher prices and volumes.

The forest and wood processing industries provide solutions which are environmentally friendly, renewable and which ensure sustainable growth. All of which contribute to carbon emission reduction.

Yesterday's ANZ commodity price index showed that world prices for New Zealand's forestry products were almost 60% higher in May 2010 than in the same period a year ago, and almost 35% higher in NZ$ terms.