Canterbury foresters advised to delay sales

Press, 4 December 1985, Page 28

Canterbury foresters advised to delay sales

Pessimism about the short-term prospects for the timber market in Canterbury is reflected in . the report of directors of. the Canterbury Forestry Foundation, to be presented to the annual meeting of members tomorrow. The foundation says that a drop in demand and an increase in log supplies have depressed prices, and it advises farmers and woodlot owners who do not have urgent reasons for selling trees to delay sales until the market improves. The drop in prices and demand has occurred in - the last three months, the foundation says. )

Early in the year the market was buoyant and some very high prices — including a sale of radiata sawlogs at $59 per cubic metre — were obtained, “as a result of strong demand driven by increased exports to Australia and frenetic construction activity locally.” However, the demand for logs has been adversely affected by the value of the New Zealand dollar, which is seriously affecting the profitability of timber exports; and high interest rates, which are threatening to force a downturn Jin the construction industry: At the same time, the

foundation says, the supply of sawlogs in Canterbury has increased, partly because farmers trying to compensate for poor returns from other farming activities have put more logs on the market, and partly because sawmillers are obtaining increasing quantities of cheap sawlogs from outside Canterbury. Stumpages for sawlogs in Otago and Southland are about half the stumpage prices in Canterbury. Not only have prices dropped, but sawmillers are more selective about the quality of logs they will accept, the foundation says. Shelterbelt logs are now more difficult to sell. Further deterioration in the log market is predicted for 1986, particularly after October, when GST is introduced. In spite of the short-term gloom, however, the foundation is optimistic about the long-term prospects for private-sector forestry. A reduction in the New Zealand .dollar value to about sAusto.B2 would return profitability to sawntimber exports to Australia, and if this were accompanied by a lowering of interest rates the timber industry could quickly return to the level of activity seen earlier this year, it says. ! r ? Canterbury, the foundation says, is “a wood-deficit region” and the deficit is expected to increase in the next 10 years. Three years ago it was predicted that the sawlog shortage in Canterbury would end about 1995, when large volumes of State logs were expected to be available. Revised forecasts, includ-

ing the Forest Service’s recently published Harvesting and Marketing Strategy, indicate that the shortage is likely to continue until after the end of the century unless the age at which trees are scheduled for harvesting is reduced. Private growers should remain in a strong position during this period, the foundation says. The foundation, a nonprofit organisation set up jointly by farm foresters and the sawmilling industry, offers valuation, marketing, and other services, including forest management advice, to its members. Its annual meeting will be held at Rangiora tomorrow, Mr A. Mac Gibbon, general manager of Canterbury Timber Products, Ltd, will be the guest speaker, and afterwards members will visit the C.T.P. plant near Rangiora.