A 125% export jump is usually a reason to celebrate, but the New Zealand timber industry is warning that the massive surge in log exports could really hurt the local sawmilling industry.
Brent Coffey, executive officer of the New Zealand Timber Industry Federation (NZTIF), told NZI Business today they are worrried the export increase may not be sustainable, as local mills are now having to compete with offshore buyers for logs.
"The prices are good and what we are seeing is local mills really having to compete against the international markets ... so we are seeing big shortages."
A lack of logs means local sawmills are being forced to cut production, says Coffey, and this will result in higher costs for New Zealand builders and timber consumers.
"We are seeing 10% increases probably this year," Coffey says.
The export surge is mainly being driven by demand from China, with 92% of the 125% surge in the last four months (to February) heading to that country.
He calls the demand from China "phenomenal" and says that it is not expected to drop off as the Chinese government has allocated $200 million to build 20 million square metres of "affordable housing" which will mostly be timber.
China needs to import approximately 160 billion cubic metres of timber annually, Coffey estimates.
The NZTIF acknowledges export growth and price increases are generally possitive for their industry overall but they want forest owners and local exporters to look long-term with their strategies and protect the local sawmillers as well.
