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Dwindling Chinese log orders drove New Zealand's shift to Indian exports

Posted on November 13, 2023 |

New Zealand's log exports have been sluggish, causing a drop in wharf prices by $4 to $5 in October, reaching a range of $110 to $117.

New Zealand's forest companies have found it more profitable to sell raw logs to China, where they are processed into Laminated Veneer Lumber (LVL).

However, China's softwood inventory in the last quarter was only 2.7 million m³, falling short of the "price trigger" at 4 million m³.

China dominates New Zealand's log export market, accounting for more than 89% of it and exerting significant control over the country's 3rd-largest export.

New Zealand previously exported over 20 million m³ of sawn wood, with South Korea a distant second at 2 million m³.

While China's manufacturing sector shows signs of recovery, consumer confidence remains low due to concerns about the Chinese construction market, impacting demand for raw logs.

New Zealand is exploring opportunities to rebuild trade with India, aiming to evade the Chinese market and leverage India's growing construction sector.

Sawn wood trade between the 2 countries fell to $28 million, largely due to concerns about methyl bromide usage.

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