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May’s a funny month, you’re hanging onto the autumn weather and good times that were had over summer, knowing fully well that winter is around the corner, and it’s going to get cold and ugly. This is usually the case for our industry as log prices generally start heading south in late autumn and rain is not our friend. However, winter came early in terms of southward heading log prices, with a significant drop in April that extended into May with mainly flat pricing at the NZ$106/JAS level for A grade. Thankfully the weather has played ball with reasonably dry conditions to date, but this is cold comfort if your logging gear is parked in the paddock. There were some hopes that May would see a price increase of substance but, with both the foreign exchange rate and the shipping costs having Julie Anne Genter levels of volatility during April and early May, our hopes have been dashed. There is some good news simmering away in the background as Chinese on port inventories stabilise and demand increases into the 72km3 per day range. Supply from NZ has dropped significantly following the poor April prices and a quickly slowing CNI salvage volume. This will likely not have an impact on the CFR price (sales price in China) in the short term until inventory gets to an uncomfortably low position. The Chinese economy grew at a faster rate than predicted in Q1 with GDP at 5.3% against a Reuters poll of analysts that expected 4.6% however, it looks like the growth was primarily front loaded with March data weakening. Property remains the red-haired stepchild with Reuters reporting new house prices falling faster in March than any time in the previous eight years. Sales plummeted 23.7% in March compared to 20.5% for the previous two months so it’s clear that any significant rebound in construction is still a pipe dream. A recent Chinese trade delegation to NZ was wowed at our wooden commercial construction, and there was a definite interest in understanding how NZ’s construction techniques and technology could be commercialized in China. It was clear that the aging Chinese population is reasonably cashed up and not necessarily interested in living in a 500-story concrete and steel apartment block. If we could help develop this market segment it may provide significant demand for NZ radiata by placing more wood into a smaller but differentiated construction sector. For perspective, the wood usage per capita in China is less than 0.4m3, compared to India at 1.61m3, and a global average of 0.55m3. This indicates that there is potential of an additional demand of 210 million cubic metres if China reached the global average. There’s been a significant reduction in non-NZ supply into China in the past 12 months with Europe dropping to around 250Km3 per month and the Pacific Northwest steady at 180Km3. Australian export supply is minimal and is primary headed to India, and NZ also has a couple of vessels destined for the capital of cricket. While we still have fumigation issues with Indian shipments, any vessel headed to our commonwealth partners takes supply away from China which is a positive. Domestic demand still remains solid although the indicators are not looking flash for the NZ construction sector in the short term. Although core inflation was lower than expected, non-tradable inflation was stickier than a half-sucked wine gum, which will give Adrian Orr the mandate he needs to keep beating us over the head with his interest rate bat. Understandably, until we see a reduction in interest rates, the NZ construction sector will remain decidedly average. Nothing to see here on the carbon front with NZU’s trading in the mid $50’s for the last few months. It’s the same story as previous months with plenty of supply and average demand as most large emitters have covered off their obligations in the short term and the speculators have left the building, for the time being. This price point still provides for a very tidy return of around $1,605/ha and, with current returns from sheep, there will be many farmers very thankful for including carbon in their cashflow. So, in summary, it’s been a very volatile few months in terms of export price, and we’re currently stuck on a rinse cycle. It’s unlikely that June will see us over the NZ$120/m3 hurdle, but we are forever hopeful. It will more than likely be August before returns are at a level that will stimulate increased supply. Let’s hope the spin cycle is a bit more user friendly. Marcus Musson is a Forest360 Director. He holds a Bachelor of Forest Science with Honours from Canterbury University, New Zealand, and specialises in steep slope cable harvesting, marketing and value recovery initiatives.  

In today’s world, where environmental conservation is at the forefront of global concerns, ensuring the responsible management of our forests is paramount. One crucial tool in achieving this goal is the PEFC (Programme for the Endorsement of Forest Certification) certification. This certification plays a vital role in safeguarding our forests and promoting sustainability. But what exactly is PEFC and Responsible Wood certification, and why does it matter for our forests? PEFC certification is a globally recognised standard for promoting sustainable forest management. It provides assurance to consumers that wood and paper products bearing the PEFC label come from responsibly managed forests. The PEFC and Responsible Wood certification process involves rigorous assessments of forest management practices against a set of strict criteria, including environmental, social, and economic aspects. One of the key reasons why PEFC and Responsible Wood certification matters for our forests is its focus on sustainability. Sustainable forest management aims to balance environmental, social, and economic considerations, ensuring that forests can continue to meet the needs of present and future generations. By adhering to PEFC standards, forest managers commit to preserving biodiversity, protecting water resources, and minimising the environmental impact of forestry operations. Moreover, PEFC and Responsible Wood certification contributes to the fight against deforestation and forest degradation. By promoting responsible forest management practices, PEFC helps combat illegal logging and encourages the conservation of valuable forest ecosystems. This is particularly significant in regions where deforestation poses a severe threat to biodiversity, climate stability, and local communities. Another crucial aspect of PEFC and Responsible Wood certification is its emphasis on stakeholder engagement and social responsibility. PEFC standards require forest managers to engage with local communities, indigenous groups, and other stakeholders to ensure that their interests and concerns are taken into account. This inclusive approach fosters transparency, accountability, and trust within the forestry sector, ultimately benefiting both people and forests. Furthermore, PEFC and Responsible Wood certification supports the market demand for sustainable wood and paper products. As consumers become increasingly aware of environmental issues, there is growing demand for products that are sourced from responsibly managed forests. The PEFC label provides assurance to consumers that they are making a sustainable choice, thus driving market demand for certified products and incentivising more forest managers to adopt sustainable practices. In Australia, where forests are not only valuable ecosystems but also integral to the cultural identity of indigenous communities, PEFC and Responsible Wood certification holds particular significance. By promoting sustainable forest management practices, PEFC helps preserve Australia’s unique biodiversity and ensures the long-term viability of its forestry industry. Moreover, PEFC and Responsible Wood certification aligns with Australia’s commitment to sustainable development and environmental stewardship, contributing to the nation’s efforts to mitigate climate change and conserve natural resources. PEFC and Responsible Wood certification helps foster collaboration and knowledge-sharing within the forestry sector. By bringing together stakeholders from government, industry, academia, and civil society, PEFC creates a platform for exchanging best practices, innovative ideas, and scientific research. This collaborative approach enables continuous improvement in forest management techniques, leading to more effective conservation efforts and better outcomes for both forests and communities. Additionally, PEFC and Responsible Wood certification enhances the competitiveness of forest products in the global market. With growing awareness of sustainability issues, many businesses and government agencies around the world require certification as a prerequisite for purchasing wood and paper products. By obtaining PEFC and Responsible Wood certification, forest managers gain access to these markets and can command premium prices for their certified products. This not only benefits certified forest owners but also incentivises others to improve their practices to remain competitive in an increasingly sustainable marketplace. Ultimately, PEFC certification helps drive positive change throughout the forestry supply chain, from forest management to product manufacturing and distribution, ensuring a more sustainable future for our forests and planet. PEFC and Responsible Wood certification plays a crucial role in ensuring the sustainability and responsible management of our forests. By adhering to PEFC standards, forest managers demonstrate their commitment to environmental stewardship, social responsibility, and sustainable development. Through certification, consumers can make informed choices that support the conservation of forests worldwide. As we strive to build a more sustainable future, PEFC and Responsible Wood certification serves as a valuable tool in safeguarding our forests for generations to come.