Strong Forest Returns in Asia

The country's forestry sector can expect to see the current strong market continuing long term, fuelled by the ongoing demand from Asia according to "the country".

New Zealand export log prices rose for a third straight month in November, pushed along by low shipping rates and demand from China, the country's largest export market.

An AgriHQ survey of exporters, forest owners and sawmillers said the forestry industry was continuing to enjoy a spell which has regularly been described as the strongest in at least 20 years.

And the data has been backed up by Marcus Musson, a director of Forest Owners Marketing Service Ltd (FOMS) and he said the returns for owners had been the most stable the market had seen since 2013.

He said historically there was a sharp price correction following Chinese New Year celebrations in February when log inventory levels in China reached levels exceeding 4 million cubic metres.

Usually there was something like 50,000 cubic metres of logs and lumber landing in China each day during the holiday period, but this year there were fewer logs and less lumber entering Chinese ports during the holiday period and, as a result, there wasn't the usual over-supply.

Prices had also been bolstered by continued low shipping rates over the past 12 months and a foreign exchange rate that favoured New Zealand.

Mr Musson expected the forest sector to continue to provide forest owners with healthy returns. He said it was a view supported by the number of Chinese buyers looking for forest investments here.

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