NZ log volumes hurt by recent stormy weather

New Zealand log supply will likely be curbed by recent stormy weather, as cyclones dented local production and disrupted sea freight.

"Rain and wind from the ex-Cyclones Debbie and Cook lashed the central and lower North Island in the past fortnight, slowing production rates and causing damage to trees," AgriHQ analyst Reece Brick said in his monthly forestry market report. "This should slow offerings to the market, but will obviously only benefit those not impacted by the weather."

AgriHQ's Brick noted that the East Coast and Hawke's Bay were significantly impacted, areas which account for about 17 percent of the country's pine plantations.

The stormy weather conditions also caused havoc to sea conditions, forcing at least one ship to cancel its booked shipments to and from New Zealand, and delaying many other shipments, Brick said.

"Ultimately, this will curb April export volumes," Brick said.

Forest products are New Zealand's third-largest commodity export group behind dairy and meat products.

Brick's monthly survey of exporters, forest owners and saw millers showed prices were little changed this month. Domestically, structural log prices for S1 logs remained at $122 a tonne, while roundwood log prices held at $92 a tonne. Pruned logs were more varied, with the P1 price lifting $2 a tonne to $179 a tonne while lesser quality types were stable or weaker.

In the export market, all measured grades were either stable or marginally firmer, with A-grade logs fetching $126 a tonne and export pruned logs at $165 a tonne.

AgriHQ noted that shipping rates to China had lifted and shipping capacity was more difficult to secure than earlier in the year.

"Commodity trading between Australia and eastern Asia, particularly in iron ore and grain, is keeping capacity active in the Pacific," Brick said. "Weather conditions in the wake of Cyclones Debbie and Cook are also limiting sea freight options.

"There is an increasing belief that once commodity exports out of Australia settle, shipping rates will begin to weaken again."

(BusinessDesk)