Northland's forestry sector has hit the ground running under level 3 lockdown, helped in large part by a combination of a weak New Zealand Dollar, increase in international log prices, and lower shipping costs.
Forestry and associated work were deemed non-essential under level 4 lockdown but harvest crews and contractors were allowed to resume work, subject to appropriate safety plans, when the country moved to level 3 last week.
The resumption has seen an increase in the supply of logs for export delivered to Northport which is expected to receive up to 12,000 tonnes a day— the same quantity of arrivals in a normal year.
Northport spokesman Peter Heath said the delivery of logs started on Tuesday last week with 2500 tonnes and increased up to 11,000 tonnes by Friday.At the start of last week, just 16,000 tonnes of logs were sitting at the port— a record low for recent years— but that number swelled to 50,000 tonnes by the end of Friday.
China is New Zealand logs biggest export market, followed by India and Korea.
Forest Owners Association research and development manager Russell Dale said forestry workers and processing plants had gone back to work and that there has been strong interest for wood from overseas markets.
"China is slowly getting back into production, the demand is increasing and although log prices have bounced back, we're not sure how long that will last.
"Clearly we are heading into major international economic depression so the impact of demand on our market will be inevitable. Our industry is confident in the short term but long term, there's a degree of vulnerability."
Dale said better export returns would be realised as the international price for A-grade logs were currently fetching around the long term average of US$125 per tonne, coupled with the major export market China resuming imports, a weak New Zealand Dollar, and lower shipping costs.
However, he said one must exercise caution as some signs gave a glum picture of the state of the forestry sector worldwide.
As an example, he said information out of Australia showed a decline in the housing and commercial activities and the volatility of international log prices.
Hancock Forest Management's contracted harvesting crews and staff are all back at work from last week and general manager Kerry Ellem said his company was focused on
fulfilling orders to both the domestic and international customers, including China.
Hancock had reduced production and crews were working four-day weeks during level 4 lockdown but nobody lost their jobs.
The company accounts for about 25 per cent of Northland's forestry harvest.
About 55 per cent of Hancock's harvest was supplied to Northland wood processors and the balance destined for the offshore market. China is the largest export destination by volume of around 70 per cent.
Chairman of the Ngāti Hine Forestry Trust, Pita Tipene, said it was pleasing the government has given the forestry sector the greenlight to go ahead in level 3 lockdown.
"Things geared up last week and this week so it's very positive. I've seen a steady stream of logging trucks going past since last week," he said.