WoodWeek – 6 April 2022

growing info milling transportation forest products

Click to Subscribe - It's FREE!

Welcome to your Wednesday in wood. It’s now clear several key wood markets around the globe are feeling the impact of Russia’s changed trade status. Discoveries of how much trade emanates from this massive wood and energy supplier are being made at pace now. We’ve got commentary for you on the bits that impact our log and lumber trade.

From Forest360’s Marcus Musson:“I’ve fielded plenty of questions from forest owners regarding the impact of Putin’s rampage on the demand for NZ logs and lumber. It will be interesting to see how this plays out as Europe have effectively stopped any Russian log and lumber imports which will likely re-direct volume into China.”

From Margules Groome: “Before the onset of the global financial crisis (GFC), Russia was China’s primary softwood log supplier. The Russian industry has transitioned towards wood processing and in 2020 Russia was the second largest exporter of sawn timber in the world. In 2020 Russia announced that export of unprocessed conifer and hardwood logs would be banned starting in 2022.

That was before a war broke out.

Looking closer to home, while the red traffic light is still glowing for in-person, indoor events, we look forward to potential relaxing of restrictions ahead of our rescheduled 2022 events for coming months including (click on the links to see programme and registration details):
• Environmental Forestry Conference on 28-29 June More >>
• Residues to Revenues Conference on 26-27 July More >>
• Carbon Forestry Conference on 9-10 August (programme coming next week) More >>
• WoodTECH Conference on 18-19 October More >>

On the establishment front, the increasing frequency and severity of flooding events across the country is highlighting the critical importance of Te Uru Rākau – New Zealand Forest Service’s erosion control initiatives. The Sustainable Land Management Hill Country Erosion Programme is the Government’s primary means of reducing soil loss on private land – through actively partnering with councils.

We leave you this week with some sad news as both the pastoral and forest industries are mourning the recent passing of Rob McLagan, who served as Chief Executive of both Federated Farmers and the Forest Owners Association.

Subscribe a friend | Unsubscribe | Advertise Here
Share |

This week we have for you:

Recent Comments

Forest360: Log export market commentary

Dynamic is a great word which means ‘a system or process characterised by constant change, activity or progress’. The forest industry is very ‘dynamic’ and the optimists within us will use the term with great endearment but, in reality, being dynamic can also be a tremendous pain in the derriere.

Export log prices conform to the ‘constant change’ part of being dynamic very well as illustrated in the graph below. This year we have seen export prices jump from $115/JAS (A grade) in January to $142/JAS in February and now back to $123/JAS in -March and, with a cost base of around $90/JAS in many regions, you’re looking at swings of 80-100% in net return to forest owners within a 3- month period. Much of this swing is around shipping cost increases since Putin started lobbing missiles at his neighbour. Actual CFR prices (sales price in China in $US) are reasonably strong in the mid $US170’s/JAS but foreign exchange and shipping costs have closed the bar early and taken the fun out of the party.

While it appears that the upward pressure on shipping prices has abated, the China log demand has come off the boil from around 80kJAS/day into the high 50kJAS/day. This reduction in demand can be attributed to a number of reasons but principally slowing construction sector and covid related shutdowns in sawmills and construction sites. In-market Chinese log inventory is in the 4.5Mm3 region which is a reduction from February, but this is likely to increase as NZ supply has strengthened following the March price increases – remembering it takes round 5 weeks from stump to market. While China holds tight with it’s covid elimination strategy (we all know how effective that is) we will likely see subdued demand and increased port waiting times as ports are shut without notice – dynamic.

I have fielded plenty of questions from forest owners regarding the impact of Putin’s rampage on the demand for NZ logs and lumber. It will be interesting to see how this plays out as Europe have effectively stopped any Russian log and lumber imports which will likely re-direct volume into China. Total Russian log/lumber supply into Europe was in the vicinity of 25Mm3/annum and should this redirect to China, has the ability to displace the total NZ supply. Although this is unlikely as Russia had imposed a log export ban in January this year, there is the potential for this supply to switch as Russia scrambles to seek sources of funding – remember he wasn’t going to invade Ukraine either.

As covid/omicron sweeps through the country, a lack of staff has resulted in longer port wait times for trucks and reduced vessel unloading and loading capacity. The ingenious decision of the EPA to effectively ban methyl bromide as a fumigant (which was used to fumigate logs stowed on the top deck of a vessel) means exporters are now scrambling around to find enough debarked logs (the only current alternative treatment to fumigation) to finish vessels off. This has created issues with adequate port storage and, when combined with covid issues, is seeing many exporters unable to accept cargo due to reaching limits on port storage. Some may see the EPA decision as the ‘progress’ part of being dynamic but I see it as a spectacular own goal.

Meanwhile, Ministers Shaw and Nash have shown how ‘dynamic’ they are by proposing changes to the ETS legislation by removing exotics from being able to be included as permanent forest from January 2023. This is more than likely an attempt to keep Damien O’Connor from going postal as mounting pressure from the Ag sector regarding farm to forest conversions will be giving him the sweats.

While the 50 Shades of Greeners will be feeling rather smug over this proposed change to policy, the reality is that there are plenty of farmers and Iwi landowners who have had the opportunity taken away from them to earn an income off very marginal land that is otherwise not viable. The Government’s idea that indigenous planting will work in these areas is flawed as the cost of establishment far outweighs any carbon gains in the short to medium term – especially in this marginal country. Anyone who has tried to establish an indigenous forest from greenfields will know that every pest wants to eat it, every spray wants to kill it and even if pests and spray are kept under control, it wants to die anyway.

In summary, there are plenty of dynamics going on in our wood-based world. Operationally there’s a few wrinkles with covid and logistics related issues, prices are a crap shoot going forward with global instability and Government policy changes to the ETS are likely to see reduced ongoing investment in greenfields projects which will likely pull the handbrake on increased carbon related land prices. So, lets raise a glass to being a dynamic industry, one thing’s for sure – it’s never boring.

Source: Forest360

Comment on this story    

ForestTECH: Call for Speakers

In November it will have been three long years since the ForestTECH community will have met in person in Australia. For New Zealand, it's been two years.

We're all looking forward to networking and learning together in person again -which has worked so well for this part of the industry for over 15 years, across New Zealand and Australia. As it well overdue, we look forward to getting everyone to meet up again, and to meet key technology and equipment providers, face to face. Travel, border and meeting restrictions in March are easing so we anticipated by November can do just that, in both countries.

Our plan is to keep the same two themes: (a) remote sensing, data capture and forest inventory and,
(b)tree crop management, automated silviculture (including mechanised planting) and forest establishment used in 2020 and early 2022 for the next tech update, ForestTECH 2022.

So we're pleased to announce our ForestTECH 2022 event is now planned to be run in Rotorua, New Zealand on 15-16 November 2022 and again in Melbourne, Australia on 22-23 November 2022. Early details can be found on the event website, www.foresttech.events/ft22

Call for speakers:
Once again, we're looking for people to share their latest case studies and learnings on developments around remote sensing, data capture, forest inventory, tree establishment, automated silviculture and mechanised planting will form the basis of the technology update – research and trial results, new and developing technologies and key lessons from industry on the integration of this technology into forest operations.

If you are interested to be considered to present at our ForestTECH 2022 event in November (New Zealand, Australia or internationally), please contact Brent Apthorp, FIEA Director, brent.apthorp@fiea.org.nz by Wednesday 20 April. Please include details of your suggested content.

Source: Friday Offcuts - 2 April 2022

Comment on this story    

Log trade implications of Russia-Ukraine conflict

(Margules Groome) Log trade in the Asia-Pacific region is dominated by imports to China – Over 20 years, log imports to China have increased four-fold and now account for 44% of total global log imports (Figure 1). Meanwhile sawn timber imports to China peaked at 22 million m3 in 2019, an increase of 17 times since the early 2000s (Figure 5). The Russia-Ukraine war could impact the forest products trade in several ways:
  • Pivot of Russian exports of logs and timber from Europe to China.
  • Place cost pressures on supply chains from Europe to China as European producers look to more attractive markets closer to home reducing their exposure to China.
  • Rising bunker fuel costs could side-line marginal log exporters (particularly south-east US, Brazil and Uruguay) to the Asia-Pacific.
Before the onset of the global financial crisis (GFC), Russia was China’s primary softwood log supplier. The Russian industry has transitioned towards wood processing(Figure 2) and in 2020 Russia was the second largest exporter of sawn timber in the world (Figure 3). In 2020 Russia announced that export of unprocessed conifer and hardwood logswould be banned starting in 2022[1]. New Zealand and Europe are the two largest suppliers of softwood logs to China (Figure 4) and Russia is the largest supplier of sawn timber (Figure 5). Despite some apparent cracks in the China real estate market, demand for log imports remains intact – at least for now. The Russia-Ukraine war may contribute to a reversal of some trends in the Chinese log supply, potentially bringing Russia back to the log export market, reorient sawn timber exports from Russia and further boost ocean freight costs.

Source: Margules Groome

More >>

Comment on this story    

Tree planting key to controlling hill country erosion

The increasing frequency and severity of flooding events across the country is highlighting the critical importance of Te Uru Rākau – New Zealand Forest Service’s erosion control initiatives. "Loss of productive land through erosion has a significant impact on the environment, economy and local communities. So, while we can’t prevent storms and floods happening, we can help mitigate against the impacts on people and livelihoods from slips and erosion, in particular by planting trees," says Alex Wilson, grants and partnerships director, Forest Development, at Te Uru Rākau – New Zealand Forest Service. Alex Wilson says erosion and its effects in hill country areas alone are estimated to cost New Zealand's economy $250 million to $350 million a year. "Taking steps to reducing erosion in the upper areas of a catchment is much more cost effective than putting in flood-control structures in the lower areas and cleaning up after a flood. Te Uru Rākau – New Zealand Forest Service works to protect farmland from storm damage by supporting farmers to plant trees to stabilise land, re-establish vegetation, or retire their most vulnerable areas.”

"Not only does this work retain productive soils on farms, it also reduces sediment entering waterways and potential downstream damage.  It is particularly important to build on-farm resilience now in the face of a changing climate,” Alex Wilson says.

The Sustainable Land Management Hill Country Erosion Programme is the Government’s primary means of reducing soil loss on private land – through actively partnering with councils.

"Establishing partnerships between farmers, councils, and Te Uru Rākau – New Zealand Forest Service is fundamental to the programme’s success. Since 2007, more than $200 million has been invested in erosion control through the programme. This includes funding from central government, councils, and farmers. We encourage farmers to work with local councils through these voluntary programmes – plan how to best protect the vulnerable parts of your property and get support to take action."

Gisborne-Tairāwhiti is the latest region to suffer significant storm damage, particularly in the township of Tokomaru Bay, which has been cut in half by damage to a bridge on the main highway.

"Tairāwhiti has a significant proportion of highly erodible land – 3 times higher than in other regions across New Zealand. In recognition of the severe erosion problems in the Tairāwhiti district the Erosion Control Funding Programme (ECFP) was established in 1992," Alex Wilson says. "Since that time, ECFP has partnered with Gisborne District Council to assist landowners in the planting or retirement of over 45,000ha of the most erodible land features in Gisborne.

"While this is a significant improvement, work still continues to reduce the impacts of erosion on the district; impacts most acutely felt by farmers and rural communities during heavy weather events, like the recent downpours on the east coast."

Evidence of Hill Country Erosion Programme (HCEP) initiatives leading to more sustainable land management can be found in a series of case studies around New Zealand, including in Hawke’s Bay, Manawatū-Whanganui, Nelson, Waikato, and Greater Wellington.

Alex Wilson says the case studies clearly demonstrate how HCEP is funding the right tree in the right place for erosion control, helping to prevent erosion in hilly country, which means less sedimentation flowing downstream – and better water quality for Kiwis to enjoy.

More >>

Source: Te Uru Rākau – New Zealand Forest Service

Comment on this story    

Vale Rob McLagan

Forest Owners And Federated Farmers Mourn Passing Of Former Chief Executive Of Both Organisations - The pastoral and forest industries are mourning the recent passing of Rob McLagan, who served as Chief Executive of both Federated Farmers and the Forest Owners Association.

Rob was CE of Federated Farmers between 1979 and 1993. He then went on to become CE of the Forest Owners Association for eight years between 1997 and his retirement in 2005.

Federated Farmers president Andrew Hoggard said the entire Federation community passes on its condolences to Rob's family.

"There's no question around his commitment to the Federation and all farmers. His tenure was long and through the troubled times of the 1980s reforms. He is remembered with the utmost respect," Andrew said.

Current Forest Owners Association Chief Executive, David Rhodes, says Rob McLagan was widely respected for both his advocacy and for his style.

“Rob placed a heavy emphasis on building and maintaining relationships and thus always had an open door ready for him when he wanted to talk. “In all his dealings with a wide range of folks from landowners to officials and government he invariably elicited the same description – a true gentleman.”

“It is some comfort to me that Rob was able to attend the 50th anniversary of the FOA in 2019 because he will forever be an important part of that history,” David Rhodes said.

Comment on this story    

OIO grants Austrian buyer third approval

(RNZ) Overseas Investment Office approves Austrian aristocrat's farm purchase for forestry conversion - An Austrian aristocrat has been given approval to buy another farm in Aotearoa and plant pine trees in it.

The latest round of Overseas Investment Office (OIO) consents show Johannes Trauttmansdorff-Weinsberg has been given the green light to purchase the 445 hectare Te Maire Farm near Masterton.

Just over 300 hectares of the farm will be planted in pine trees which will be harvested in 2048, before a second rotation is planted. Described as an experienced forestry investor by the OIO, Trauttmansdorff- Weinsberg purchased three farms in 2019 for conversion to forestry.

More >>

Source: RNZ News

Comment on this story    

Iwi group unhappy with proposed carbon changes

Penetaui Kleskovic is the commercial operation manager for Tai Tokerau iwi Te Aupouri. His group is not happy with proposed change is to exclude future permanent plantings of exotic forests like radiata pine from the ETS.

More >>

Comment on this story    

Treasure in tree rings: Calculating sequestration

Having a solid estimate of the amount of carbon that forests can pull from the atmosphere is essential for global accounting of climate change—leaders are counting on forests to pull a good chunk of human- produced carbon back to earth. But in reality, forests' ability to sequester carbon isn't as straightforward as it might appear on paper. In a new research synthesis, Justin DeRose from Department of Wildland Resources and colleagues from across North America offered an alternative strategy to counter the uncertainty of calculating the carbon that forests can sequester, using tree ring data from forest inventory plots.

Oceans, soils and forests are 'carbon sinks'—they have the ability to pull more carbon from the atmosphere than they put into it. Countries around the world depend on carbon sinks in their tally for achieving net-zero emissions. But the complex and delicate ecology of these systems are still somewhat unpredictable. Questions remain about how exactly forests will respond to the changing climate, and how to calculate what forests can do to help balance carbon accounts.

The global total for carbon pulled from the atmosphere by carbon sinks is traditionally estimated indirectly, by figuring the difference between human-produced emissions, the amount of carbon in the world's oceans and the level of atmospheric concentrations of CO2. Supplementing that indirect calculation with data from existing (and future) collections of tree rings could provide an on-the-ground, direct record of the carbon gained by individual trees and forests, with the specificity of an annual time stamp, DeRose said. And from there, researchers could scale up to estimate forest-wide and continent-wide carbon savings. Some existing tree ring data from recent inventories exists, but more work is needed to to interpret what this data offers as applied to carbon sequestration. For such a system to work, a few things need to happen first, DeRose said. Tree ring samples, along with the collection of associated forest data, could be collected nationally by efforts like the US Forest Inventory and Analysis Program. The goal of these programs historically has been to understand forest change, but they are a perfect tool to also help answer questions about carbon and climate systems. Although tree core samples have been collected during some inventories, their continued collection in all forests will require a concerted effort.

Source: phys.org

More >>

Comment on this story    

Almost finally ... Who's the Auld Mug now?

OPINION: “Land ahoy,” bellows Lord Admiral Grant Dalton from high on his poop deck. “Raise the flag, First Mate Peter. No, not that frayed old Kiwi ensign, hoist that big green baby with the big fat $ sign.”

It is not hard to picture Dalton as a real-life Captain Jack Sparrow, sailing international waters looking to nail his tattered banner to the highest bidder’s mast. It is a wonder he wasn't hopping on a peg leg, adjusting an eye-patch and shouting “shiver me timbers” as he dropped his big April Fool's Day joke two days early: Team New Zealand will defend the America's Cup in Barcelona, not Auckland.

How it must stick in Kiwi craws to see shots of Dalton giving smug, if not secret, handshakes to Catalonian bigwigs, bright light glinting off the Auld Mug – and a 171-year-old trophy languishing on the foredeck. The America's Cup team may have saltwater in their veins but ‘’Team Dalton’’ today seem to be basically in it for the dough – and they have had truckloads from the public purse. Grant by name, grant by nature – the old mugs here are Kiwi taxpayers.

The New Zealand Government sank $136 million into the last America's Cup campaign here and the Auckland council coughed up $113 million in infrastructure spend.

More >>

Source: Stuff

(BusinessDesk) More thoughts on April Fool’s Day – In any event, since 1863 it’s been recognised that it’s never a good idea to make a genuine news announcement on the 1st of April. This explains why Team New Zealand announced earlier in the week that Barcelona will be the host city for the next edition of the Americas Cup in 2024. Had that decision been announced today it would have been lauded as a brilliant April Fools’ hoax, based on the hilarious assumption that Barcelona is capable of building the infrastructure necessary to host the America's Cup between now and September 2024. Barcelona is, after all, the city that still hasn’t finished a cathedral they started building in 1882.

More >>

Comment on this story    


Buy and Sell

... and finally ... funny thinking that

Some interesting observations on life:

• One minute you're young and fun. Next, you're turning down the car stereo to see better.
• Some people are like clouds, once they disappear it's a beautiful day.
• Common sense isn’t a gift. It's a punishment ‘cause you have to deal with everyone else who doesn't have it.
• I'm at a place in my life where errands are starting to count as going out.
• When I was a kid I wanted to be older but this is not what I expected!
• It's probably my age that tricks people into thinking I'm an adult.

Image below: "Seen on newsroom"

That's all for this week's wood news.

If you enjoy WoodWeek - pass it on. Go on - tell a mate to subscribe – it’s FREE!

John Stulen
Innovatek Limited
PO Box 1230
Rotorua, New Zealand
Mob: +64 27 275 8011
Web: www.woodweek.com

Share |

We welcome comments and contributions on WoodWeek. For details on advertising for positions within the forest products industry or for products and services, either within the weekly newsletter or on this web page, please contact us.

Subscribe! It's Free!
Advertise Here
Copyright 2004-2022 © Innovatek Ltd. All rights reserved
Bookmark and Share