Export log prices in New Zealand remained stable in March due to the increasing demand that made the shipping costs grow.
The average wharf gate price for New Zealand A-grade logs stuck at $119 a tonne in April, from March, according to AgriHQ's monthly survey of exporters, forest owners and sawmillers.
The A-grade logs in China, the largest market for NZ, went up to US$111/JAS from US$107/JAS last month, due to the decreased demand caused by the Chinese New Year holiday. Also, the log inventories on Chinese ports reached 3.6 million m3 to 3.8 million m3, with a 6,000 tonne offtake per day.
"With the Chinese New Year period well and truly passed, activity has increased in the Chinese market. The build-up of inventories on port this year did not reach the high levels observed in previous years, largely due to the lower volumes hitting Chinese ports from New Zealand prior to this period, coupled with a faster recovery in market activity after the Chinese New Year holidays. General demand out of the Chinese market has been relatively positive,” AgriHQ analysts Reece Brick and Shaye Lee said in their report.
An increased price of oil caused the shipping prices to go up, because fewer ships visited New Zealand due to a decline in the importation of products such as palm kernel and fertilizer.
As for New Zealand domestic market, the structural log prices are supported by the increased demand from the construction sector. Also, a big demand for roundwood in the horticulture and viticulture industries is starting a decline in demand from the dairy industry. Nevertheless, the pulp market was steady, as AgriHQ reported.