China had been a market for unpruned logs but that was no longer the case, John Turkington said. Photo: 123RF
International demand for pruned logs from New Zealand is the highest ever seen by a forest manager with 30 years experience in the sector.
John Turkington owns John Turkington Forestry - a Manawatū company that plants, manages, harvests and markets radiata pine and he cannot understand why forest owners do not prune plantation forests.
For 15 years China had been a strong market for low-value, unpruned logs, but that was not the case now and was unlikely to be in the future, he said.
"Things are fundamentally changed in my view, in China. And this is where we are going to be at.
"The crashes are getting closer and closer together and the range of prices is becoming more and more marked. So you used to have a fluctuation around a $20 spread - now it's more like $60 (between the high and low prices)."
Export logs prices there are at an eight-year low and many harvesting gangs are currently without work.
The stable growth area is with pruned logs, according to Turkington.
"Pruned logs per tonne is sort of sitting firmly at $200 or north of $200, it depends where it is sold to. Whereas the A grade which is the predominant diet in China is sitting in the early $100's," he said.
The added bonus with pruned logs was they were turned into product and then sent off shore so the "value add happens in New Zealand, which is another bonus".
Turkington admitted that for sheep and beef farmers with sizeable wood lots at present, they were not going to have available funds to prune the trees, especially when the payback was 15 or 20 years away.
But he added "they could plant fewer trees and make sure they prune them".
"There's always been a market for pruned logs and there's been relative stability over an extended period of time. But if you go back the last three or four years, the price has increased and the differential between the pruned logs and the unpruned logs is getting greater."
He said while he was not a sawmill owner, the demand must be there or they would not keep putting the price up or keep ordering pruned logs if they were able to fill their files.