29 Mar 2010

Forest owners confident NZ can meet increased demand

9:17 pm on 29 March 2010

The forestry sector is confident it has got the wood supply to meet surging demand for logs, mainly from China.

The Forest Owners Association thinks the industry will be able to plug any future gap caused by the fall-off in planting in recent years.

New Zealand log exports to China have lifted by 20% since November last year. There is also strong and increasing demand from South Korea and India and export prices, which started to pick up almost a year ago, are still rising.

Peter Berg, of the Forest Owners Association, says the current drive in demand looks to be sustained.

He says the wood from 30 years of large-scale planting will meet that demand, even with the lack of plantation renewal that has been a feature of the past few years.

Mr Berg says there has been a resurgence of interest in planting and that needs to be built on.

The latest projections indicate the area planted in forest could increase by about 18,000 hectares in the next three years.

Infrastructure challenged

However, there are concerns the lack of infrastructure is restricting the sector's ability to take full advantage of the boom.

The marketing manager of forestry services operator PF Olsen, Peter Weblin, says the challenge is getting the trees harvested and transported.

Peter Berg says the shortage of contractors and transport is a particular issue for smaller plantation owners.

He also says shipping costs are rising, with a steep increase in the past month.