Demand for logs driving up prices

JILL GALLOWAY AND JANINE RANKIN
Last updated 09:00 08/02/2014

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Buyers are likely to have to pay more for timber as millers expect prices to jump as they battle a shortage of logs.

It is being driven by a two-decade high price for logs being exported.

Foxton-based Mitchpine's owner Grant Mitchell said they would have to pay international prices to attract logs for processing and that would be passed on.

He said foresters would rather send logs to the wharf as specifications for export logs are very open, while New Zealand mills need specific high quality grades.

"There is a shortage as a result. Customers will have to pay for the timber they buy."

Mr Mitchell said Mitchpine only processed radiata pine and most of it was wood from the region.

"It is cheaper to get logs from around here. I can't get them for Wellington, it would be too costly to transport them."

Feilding's Ruahine Timber spokesman Josh Hapi said they got their timber from processors.

He said while there wasn't a shortage yet for most posts and timber, they would have to pass on additional costs to clients.

"Everything is going to export so the processor will have to pay more. It's hard to say yet, whether we'll be able to compete [against export prices]."

Most logs were going to China, which switched to New Zealand when Russian timber became dearer, said Mr Mitchell.

"Don't get me wrong. High log prices are good for New Zealand and we do have some devoted log suppliers who keep sending us logs here."

Last year, New Zealand processed just under half the amount of logs it exported. It processed 7 million cubic metres of logs while 16 million cubic metres were sold overseas, 70 per cent to China.

Log prices have jumped 25 to 30 per cent in the past two years.

About 70 per cent of the logs being harvested from the Gordon Kear Forest on the outskirts of Palmerston North beginning this week is destined for export.

City council business development executive Fiona Dredge said the joint owners, the Manawatu District Council and Palmerston North City Council, expected about 19,000 tonnes to be extracted this summer.

The remaining 30 per cent will go to mills in Dannevirke, Masterton, Levin and Tangiwai.

The councils are budgeting to make $700,000 profit this year after paying for logging, cartage and fees.

The forest is off-limits to the public, including the Te Araroa Trail's Burton's Track section which is closed on weekdays during harvesting.

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- Manawatu Standard

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