NZ-China log exports at virtual standstill - Forest Owners Association

A lack of space at Chinese ports due to caution over coronavirus is bringing a "virtual halt" to New Zealand log exports to China, the Forest Owners Association said.

Precautions in China for the coronavirus outbreak have resulted in almost no offtake of logs in China for processing, the association said.

Log exporters said the remaining log yard space at most ports near processing centres is quickly disappearing.

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Logs are New Zealand's third biggest export and China is far the biggest export destination.

Association President Peter Weir said exporters had hoped that the business would return to normal after the extended Chinese New Year holiday finished two weeks ago.

"That hasn't happened. Many Chinese sawmills are yet to get back to work," Weir said in a statement.

"New Zealand exporters have nowhere else to send the industrial grade logs they harvest," he said.

While New Zealand's domestic sawmills usually take about 40 per cent of the harvest, sawmills supplying the New Zealand housing market will only buy stiffer and higher quality sawlogs or knot-free logs from pruned trees for joinery.

The upper logs from a pruned true often grade as industrial logs, and these logs are exported.

"In regions where there is no domestic sawmilling, many harvest contracting crews are being put on reduced hours or, worst case, (being) stood down," Weir said.

Log exports to China were worth $2.7 billion for the year to the end of December 2019.

Over the past three months large volumes of European spruce salvaged from forests under attack by insects have been shipped into log markets in China.

The flood of salvaged logs is directly attributable to climate change with recent warm winters and longer summers.

Weir said there would have been much less inventory pressure if these exports had not arrived in China. The concern about coronavirus has happened at just the wrong time for New Zealand, he said.

Weir said the situation was fluid with different forest owners and management companies taking different approaches.

"NZ Forests Association members are doing what we can to retain our skilled labour force by sending better logs to domestic sawmills to make up for the shortfall from farm woodlots where logging has already ceased," he said.