New Zealand forestry contractors are preparing for a difficult summer as they wait for log prices to rebound and harvests to resume momentum. A recent survey of the members of the Forest Industry Contractors Association found that only about 35% of them operate as usual.
Prices were close to record levels at the beginning of 2021 but fell to their lowest point since the end of 2015 last month. As a result, the number of logs shipped to the port has slowed significantly, and many loggers have been told to reduce production capacity or even stop work.
China is New Zealand's largest overseas log market, accounting for approximately 70-90% of exports. Phil Taylor, chairman of the Forest Owners Association, said a "perfect storm" caused a sudden drop in prices. This includes a reduction in demand in China and a significant increase in transportation costs.
"Currently international shipping is severely disrupted" Taylor. Phil Taylor said the situation is very unstable but expects the low prices to continue into the first quarter of next year.
He said that the biggest pressure is the impact of reduced logging rates on logging and trucking contractors.
