The amount of log harvesting in Northland is not what it used to be a few years ago, an industry leader says.
Photo / NZME
The amount of log harvesting in Northland is not what it used to be a few years ago, an industry leader says.
Photo / NZME
Some forestry contractors are moving out of Northland because of a lack of work, although international log prices and the export market have improved.
Export prices for A-grade unpruned logs fell from $171 a cubic metre last June to $108 in December, forcing the likes of Northland-based Fusion Logging tostop work and lay off staff just before Christmas.
To make matters worse for New Zealand log exporters, only about 50 per cent of trees are suitable for Kiwi sawmills.
Latest figures show the international log price is US$160 but rising fuel prices are starting to affect international freight costs.
Fusion Logging owner Ernest Morton had to reduce his workforce from 27 to eight before the new year.
"Prices have improved to keep us going at the moment but there's always the problem of getting workers back during Covid and even if we restart operations, we are unsure what's going to happen.
"People are starting to move to places like Gisborne for greener pastures because there's not much harvesting to be done in Northland as was a few years ago. Silviculture will be in good demand up here.
"We need to diversify whereby loggers need to be able to do other forms of forestry work when business is down. The logistics of everything has changed dramatically. It's a matter of survival for the forestry crew," Morton said.
Ernest Morton is yet to rehire staff he laid off before Christmas as forestry work in Northland begins to dry up. Photo / Supplied
Manulife Forest Management NZ Ltd general manager Kerry Ellem said the only disruption to log prices and the export market at this stage was Covid.
His company, also known as Hancock Forestry, is one of the biggest logging contractors in Northland and even during a downturn in the export prices late last year, Manulife continued to export logs predominantly to China and to smaller markets India, Japan, South Korea and Taiwan.
"Things are looking better and while log prices have improved, the cost of international freight is quite high so they cancel each other out. It costs around US$70 a ton to send logs from New Zealand to China at present and that was $40 in January.
"Similarly, the cost of a ton of bunker fuel for shipping companies, which is the cost of fuel needed to run vessels, has gone up from normally $400 to $500 to nearly $1000 so it's at a very high level," Ellem said.
He said Manulife's first priority was to supply New Zealand sawmills with good-quality logs while those unsuitable for the domestic market were exported.
Northport has a total log capacity of 250,000 tonnes.
China is the biggest export market for New Zealand logs, followed by India and South Korea.
