New Zealand’s forestry sector will encounter an even larger growth in the market due to the ongoing demand from Asia. November, the export log prices in the country rose for a third straight month, also due to the low shipping rates and demand from China, the country's largest export market.

As reported by NZ Herald, following the AgriHQ survey of exporters, forest owners and sawmillers, the forestry industry was continuing to enjoy a spell which has regularly been described as the strongest in at least 20 years.

Also, the information has been sustained by Marcus Musson, a director of Forest Owners Marketing Service Ltd (FOMS), a company that provides harvesting and marketing services to private forest owners across the North Island.

Musson added that the returns for owners sector was the most stable for the market since 2013. Following the Chinese New Year celebrations in February, there has been a sharp price correction and the when log inventory levels in China reached levels exceeding 4 million m3.

According to NZ Herald, usually there was something like 50,000 cubic metres of logs and lumber landing in China each day during the holiday period, "a time which basically has zero demand for between two and four weeks,” Musson explained.

"This is also coupled with a reduction in Chinese domestic harvest due to continued issues with erosion and water quality as a result of deforestation across the country. The Chinese domestic harvest supplies about 60 per cent of the 66 million cubic metres used in China annually," Mr Musson said.
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Yet, this year fewer logs and less lumber entered the Chinese ports in the holiday period, so the usual over-supply wasn’t the same. Also the prices were supported by the continued low shipping rates from the last 12 months and the foreign exchange rate that was in favor of New Zealand.

​The latest figures in from Wood Markets shows the New Zealand forestry industry’s market tactics still involve spurning aftermarket opportunities in favour of the quick flick.
 
Chinese wood products production and demand increased in 2016, fuelling log and lumber import gains from Russia, but also from the USA, New Zealand (logs), Australia (logs), Canada (logs) and Europe (lumber).

Final year-end statistics for 2016 show that China's imports of logs and lumber have rebounded strongly from the slowdown in 2015. Softwood lumber imports soared to new heights and recorded the highest import volumes ever.

China imported 48.7 million m³ of logs in 2016, an increase of 9% from 2015. Of the total log imports, softwood log imports were 33.7 million m³ (+13% as compared to 2015), while the hardwoods were 15.1 million m³ (+2%). China imported 31.6 million m³ of lumber in 2016, up 19% over 2015. Of the total lumber imports, softwood lumber imports were 21.1 million m³ (+21% as compared to 2015), while the hardwoods were 10.6 million m³ (+15%).

These and other year-end statistics and analysis will be featured in the February issue of Wood Markets' monthly China Bulletin that will be released after Chinese New Year in February.
With steady to increasing demand in 2016 and with well-balanced inventories, both softwood log imports and prices (in US$/ m³) increased throughout the year. New Zealand softwood log exports continue to dominate exporters to China and increased by 12% in 2016 at 11.6 million m³. This was followed by Russia (9.2 million m³), USA (4.5 million m³), Australia (3.3 million m³) and Canada (2.8 million m³). The 2016 softwood log import volumes have only been exceeded by the record volume in 2014 of 35.5 million m³.

China's softwood lumber imports ramped up dramatically in 2016 to reach an all-time high. This was fuelled by growing market demand for lumber for use in the furniture, door, window and finishing segments and, to a lesser degree, in construction end uses. With rising property values in Tier 1 cities, softwood lumber prices also picked up throughout the year.
Russian softwood lumber imports took off in 2016 from new capacity expansions and installations that were stimulated by high margins from the weak ruble. As well, "squared" logs and cants imports (classified as lumber so that no log export tax is paid) continued to increase. 
 
Russian softwood lumber imports soared by 38% (where Wood Market has adjusted this volume lower from the official statistics to account for a large error) and totalled 11.6 million m³. This was followed by Canada (5.2 million m³; -6%), Finland (0.95 million m³; +55%); Chile (0.75 million m³; +10%); Sweden (0.69 million m³; +34%); and the USA (0.64 million m³; +8%). Scandinavian exports surged as demand was very strong in the furniture, door and decoration segment. Of the top 10 exporters to China, only Canada (-6%), New Zealand (-18%), and Germany (-6%) recorded decreases in softwood lumber exports to China in 2016.
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Further details and analysis on the market highlights in 2016 and trends for 2017 will be provided in the February issue of the China Bulletin.  The China Bulletin has been published monthly since 2007 by WOOD MARKETS and provides analysis, import/export statistics and prices on logs, lumber, panels and other products.

​The Forest Department has decided to issue online about 500 new licences for establishing wood-based industries, said Forest Minister Rao Narbir Singh said here today. The licences of functional wood-based industries would also be renewed online, the minister added.

The minister said that the department had already launched two e-Citizen services, namely “Permission for Felling of Trees” and “NoCs in respect of PLPA or Forest or Restricted land”.  These two services had been integrated with the Right to Service Act.

He said that Forest Department had so far carried out digitisation of block forest areas in 14 districts through HARSAC . The digitisation work in the districts of Mahendragarh, Ambala, Kurukshetra, Mewat, Gurgaon, Faridabad and Rewari was under progress. He said that the department had planted 141.01 lakh saplings over 18,842 hectares. Besides, 31.56 lakh plants had also been sold or distributed under the ‘Har Ghar Hariyali’ programme.

​An Interpol report released on International Anti-Corruption Day underlines the scale of criminal activity tied to the forestry sector and the importance of coordinating anti-corruption efforts to protect forests.
 
Among its key findings, the report entitled Uncovering the Risks of Corruption in the Forestry Sector estimates that the annual global cost of corruption in the forestry sector is worth some USD 29 billion.

It also found that bribery is reported as the most common form of corruption in the forestry sector. Other forms of corruption include fraud, abuse of office, extortion, cronyism and nepotism.

The report says that criminal networks use corruption and bribe officials to establish ‘safe passage’ for the illegal movement of timber. Criminal groups also exploit these routes to transport other illicit goods such as drugs and firearms.

It includes an example from Peru where the mayor of an important timber trading city was arrested for his involvement in drug trafficking through plywood shipments. The mayor controlled a timber business that had been used to strategically build a logistical network for bribing officials to move illegally harvested timber out of the country.

Using this network, the mayor and other drug traffickers were able to move cocaine hidden in plywood shipments. Upon arrest, police seized assets worth USD 71 million which could not be accounted for.

“By raising awareness and documenting current corruption practices as well as potential solutions, we empower law enforcement officers in the field. This increases the chances of criminals getting caught and is one of the greatest deterrents to corruption,” said Interpol secretary general Jürgen Stock.
 
“An international, coordinated response is an essential part of the solution to combat the organized transnational criminal groups involved in forestry crime. Our collective goal must be to turn corruption into a high risk, low profit activity,” added the head of Interpol.
 
To this end the key measures that the report recommends include capacity building across the entire law enforcement chain, enhanced financial investigation techniques, and adoption of Interpol's I-24/7 global secure communications network for anti-corruption investigators.
 
In 2012, Interpol launched Project Leaf to counter various aspects of forestry crime, including illegal logging and timber trafficking, and related crimes such as corruption.
Under the Project, Interpol can issue international notices and alerts on behalf of member countries to request information on, and warn of, the movements and activities of people, vehicles and vessels.

It can also organize national and regional training sessions relevant to forestry crime, including evidence collection, chain-of-custody and operational planning.
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Funded by the Norwegian Agency for Development, Project Leaf works in collaboration with UN Environment to help shape a global response to forestry crime.

Sawlog prices have trended downward throughout the world over the past two years with the GSPI Index being 14.3% lower in the 3Q/16 than in the 3Q/14.

The GSPI sawlog price index fell again in the 3Q/16 and was 21% below its all-time high five years ago. Over the past two years, sawlog prices have fallen far more in Europe than in North America, where prices have only seen a modest decline.

Global sawlogs prices fell in the 3Q/16 after a temporary increase in the 2Q/16 following an almost two year-long downward trend. The Global Sawlog Price Index (GSPI) has fallen by 14.3% in two years and is currently almost 12% below the ten-year average and 21% down from the all-time high in the second quarter of 2011.

The biggest price declines quarter-over-quarter occurred in British Colombia, Eastern Canada, Poland and Sweden. Although most key lumber-producing countries experienced lower log costs in the 3Q/16, there were also several regions where prices increased in US dollar terms, including Brazil, Russia, Norway and New Zealand. The major reason for the higher prices in this group of countries has been the strengthening of the currencies relative to the US dollar. In the local currencies, log price adjustments have been minimal in 2016.

Over the past two years, sawlog prices have fallen the least (just over five percent) in North America as compared to Latin America and Oceania, where prices were down by about 14%, and in Europe where prices currently are more than 20% below 2014 prices, reports the Wood Resource Quarterly. The biggest price declines on the European continent have been in Central Europe.

​Regional sawlog prices around the world have generally converged during 2015 and 2016 with prices in high-cost regions having declined more than prices in low-cost regions. Despite these developments, price discrepancies between the large lumber-producing regions of the world have been higher in 2016 than they were back in 2000-2005.

Market conditions have remained stable to slightly firm across most log segments over the last month. Domestic supply constraints appear to have improved but all regions report sawmills are just getting enough logs. Some were reported to be bending a few of the quality rules to get the volume of logs they need.


Our log pricing review suggests domestic prices across several grades have improved by three dollars a tonne overall. But this is very much the average with, in one region, a rise of as much as $10 a tonne since July. Export pruned logs have dropped five dollars a cubic metre. It is good to see a price correction but based on my recent trip to China I can confirm quality remains a big problem.

Overall, unpruned export prices have improved four dollars a cubic metre since the last Tree Grower report. There is an interesting scenario developing here. It is evident that where more than one India export company is operating at a port, the equivalent China prices have risen more sharply. The China exporters are having to squeeze their margins to get what they need.

This is the first tangible sign of the India market featuring sufficiently strong enough to significantly influence prices. From a New Zealand forest grower perspective, long may this continue.
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India prices are remaining slightly ahead of China based on prices at the New Zealand wharf. This is particularly so in the lower priced bottom grades where industrial and pulp logs have a clear preference in India.

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

The average wharf gate price for New Zealand A-grade logs advanced to $117 a tonne in November, from $113 a tonne in October, and ahead of the $92 a tonne recorded in November last year, according to AgriHQ's monthly survey of exporters, forest owners and saw millers.

Forest products are New Zealand's third-largest commodity export group behind dairy and meat products, and returns to New Zealand growers are influenced not only by demand in overseas markets but also the relative cost of shipping and fluctuations in the exchange rate. China's appetite for logs is holding at a positive level, aided by lower inventory levels and demand from the country's construction sector, according to AgriHQ's latest monthly report.

"Exporters have continued to find firm interest from Chinese buyers through the past month," AgriHQ analysts Reece Brick and Shaye Lee said in their report. "Port-level inventories indicate that any downwards movement in CFR (cost-and-freight) pricing through into next year is unlikely."

Chinese housing data showed the average price of a newly built home rose 11.2 percent in September, the strongest growth since those records began in 2011, and ahead of August's 9.2 percent pace, the report said, although it indicated the pace was likely to slow as new regulations bite.

"The continued surge in property prices has led to the authorities imposing further tightening measures, effective from October," the report said. "This is likely to have caused potential buyers to rush in to make last-minute purchases before the new measures became effective, adding to the surge in prices."

While the effect of the cooling measures is yet to be reflected in the data, there are reports of property sales volumes already declining in major cities, the report said.

Shipping rates have "nudged up a little" but remain lower than any month through 2015, as continued excess shipping capacity and lower crude oil prices help keep rates subdued.

Meanwhile, the average wharf gate price for pruned logs advanced $4 to $163 a tonne, although younger, bark-on logs were fetching as little as $130 a tonne due to problems with sap staining, AgriHQ said.

In the domestic market, construction activity is boosting demand for structural logs, with the price for S1 logs hitting the highest level since mid-2014.

"The New Zealand forestry industry is continuing to enjoy a spell which has regularly been described as the strongest in at least 20 years," the report said. "The booming housing construction industry has kept demand from mills very firm, especially for structural logs."

Structural S1 logs lifted to $117 a tonne from $115 a tonne, and the Nov. 14 earthquake and subsequent road closures had caused some logistical issues which would add to supply pressure in the South Island.