Forecasts confirm increasing wood flows

Date 18/02/08

New wood availability forecasts for the East Coast confirm increasing wood flows

New wood availability forecasts for the East Coast compiled by the Ministry of Agriculture and Forestry will assist with future regional planning for the forest industry and provide infrastructure agencies with credible data for future planning, says John Vaney, Regional Team Leader with MAF Policy in Rotorua.

The forecasts covering the period 2007 to 2040 have been developed by incorporating harvesting intentions of the region’s large-scale forest owners through to the year ended 2015

The forecasts indicate that the availability of Radiata pine from the East Coast will gradually increase from 2007 through to 2013 from 1.1 million cubic metres to around 2.0 million cubic metres per year. From this point forward the East Coast regional harvest has the potential to increase to around 3.4 million cubic metres per year after 2020 through to 2034, after which the total harvest is projected to decline if no new land planting occurs.

The timing (and level) of decrease will depend on the rate at which the region’s post-1990 forests are harvested, the extent to which they are replanted, and also the level of new land planting. The forecasts are based on no new land planting.

“The report confirms that the East Coast Wood Supply Region has an extensive forest growing industry with considerable potential for future utilisation and development”, says Julian Kohn, Chairman of the Eastland Wood Council.

Most of the potential increase in wood availability from 2013 on will come from the region’s small-scale forest growers who established forests during the 1990s.

The actual timing of the harvest from these forests will depend on market conditions and the decisions of a number of small-scale owners. Market conditions and logistical constraints (availability of logging crews, transport capacity, and wood processing capacity) will limit how quickly the additional wood available from small-scale owners’ forests can be harvested in that period.

The forecasts provide a clear signal that the transport infrastructure and harvesting capacity in the region will continue to come under increasing pressure and that ongoing investment will be required in these areas. There will also be potential from that time for new wood processing investment or expansion of existing plants”, says Julian Kohn.

The Ministry of Agriculture and Forestry is currently finalising a report on the East Coast Forestry Industry, in association with the Eastland Wood Council and the major growers and processors in the region. This report will contain these wood availability forecasts along with descriptions of the region's forests, wood processing industries and infrastructure. The report will also describe the opportunities and constraints facing the forest industry on the East Coast. This report is expected to be published by June 2008.

The wood availability forecasts are also available online at:

http://www.maf.govt.nz/mafnet/publications/wood-availability/east-coast/

1.1 Background on the forestry sector in the East Coast region

- There is a well-established forest growing industry in the East Coast Region (Gisborne District).

- Radiata pine makes up 98 percent (152 000 hectares) and Douglas-fir 1 percent (1800 hectares) of the forest area and there are nearly 3000 hectares of other exotic hardwood and softwood species in the East Coast Wood Supply Region.

- There are six large-scale growers in the region, and a number of smaller growers that are attracted by the good tree growing conditions, improved roading infrastructure and access to an export port.

- Currently the industry is affected by a tight domestic market for timber, high shipping costs for export logs and an exchange rate at higher than desirable levels. There is also strong demand for labour, meaning a shortage of people to work in a variety of forestry jobs. Housing availability and pricing may also become a problem in the short term if there is a sudden influx of workers

- The current local wood processing capacity is a constraint with forest owners forced to export large volumes of logs. This leaves the region more exposed to the log export market than other regions.

- The current lack of a local market for pulp/chip logs is a constraint on profitability and maximum utilisation of forest production.

ENDS

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