Forestry Minister Shane Jones said log traders had allowed themselves to become "intoxicated" by very high prices in China at the expense of the local processing industry.

"A" grade log prices have gone from US$138/140 a tonne early in the year to US$110 a tonne, and could sink as low as US$100 to US$105/tonne due to a raft of factors, among them being cheap imports arriving by rail from Eastern Europe, a weakening renminbi and a cooling local economy.

The decline comes after five years of very strong prices for New Zealand logs in China.

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