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Wood markets and economics - many questions to answer
Authors: Julian BatesonPublication: New Zealand Journal of Forestry, Volume N.Z.J.For. 2013, Issue N.Z.J.For. 58(3) 2013, pp 2, Nov 2013
Publisher: New Zealand Institute of Forestry
Abstract: Markets can be quite complex. For a long time the price for exported radiata pine logs has been lower than was expected, particularly when the high prices of the 1990s encouraged a lot of planting. The current high dollar exchange rate has not helped. However, recently there has been a slightly higher return for exported logs, which is good news for those sending logs over the wharf. There is of course the down side. Sawmills in New Zealand have to buy trees from many of the same places as exporters and need to be able to obtain logs at prices which match or exceed those paid for export. If the mill can still sell the sawn timber at a profit, then it remains viable. If not, business failure is likely. The recent closure of the sawmill in Rotorua has been blamed on an inability for the mill to make a profit as log prices increase but sawn timber prices remain static. I am sure we will hear more of the details as time passes, but not understanding the markets makes it very difficult for a business to remain viable.