During the first eight months, total shipments were 25 percent higher than the same period last year (54 percent higher by value) and total exports for 2011 may reach as high as 13 million m3, which is more than a doubling from just three years ago. It is worth noting that almost half of the timber harvest in the 2Q was shipped overseas in log form and that almost one-third of the timber harvest in New Zealand is shipped to Chinese sawmills.

While log exports have increased substantially this year thanks to demand in China, lumber exports have actually declined from last year. This highlights the concern in the industry that domestic sawmills increasingly have difficulty competing for logs with the log exporters and thus may have to reduced production and the layoff of employees.

The steady increase in log exports the past five years may very well continue in the coming 15 years as the theoretical harvest level in New Zealand is set to double to 55 million m3 by 2024. Most observers in the industry agree that, for a number of reasons, this timber harvest scenario is less likely. Depending on market conditions, a more realistic level of annual timber harvests in 15 years would be between 35 and 45 million m3 annually. Even this lower harvest outlook alternative would increase available log supply from the current levels by over 50 percent.

Source: Wood Resources International LLC