New Zealand may be the second-largest supplier of logs to China, but the quality of some of the radiata pine logs it is sending does not compare well with logs from Canada and the United States' north-west, says a Canadian consultant.
But Gerry Van Leeuwen, vice-president of Vancouver-based, International Wood Markets Group, told a New Zealand forest-sector conference in Wellington that the New Zealand logs were competitively priced.
Van Leeuwan spoke to the ForestWood conference from Canada in a bid to canvass risk and opportunities for New Zealand's radiata pine exports to China, and urged exporters to remember they had to be price-competitive in that market.
China has been taking about half of the 2.2 to 2.5 million cubic metres of logs exported each three months, and its global imports of logs jumped 24% to 11 million cubic metres in the first four months of 2010, compared with the same period in 2009.
Part of that surge of logs was made up of New Zealand logs, with sendings to China reported to be up 75% to 1.8 million cubic metres.
The main supplier of logs to China, Russia, has slashed its sendings over the past couple of years as the Moscow government put a 25% duty on its log exports, though many Chinese sawmillers have moved across the border to mill logs in Russia, and ship timber to China.
Russian log exports to China dropped by 10 million cubic metres between 2007 and 2009 - a gap that is seen to provide increased opportunities for New Zealand.
China's wood deficit has been project to grow 100 million cubic metres to 150 million cubic metres by 2015, at about 8% a year, though Van Leeuwen said his latest trip to China suggested the deficit was actually growing at an annual rate of 10% to 15%.
"I was very impressed with the volumes of NZ logs I saw being unloaded in China," Van Leeuwen said.
"The quality of the logs didn't overly impress me, there were a lot of big knots and some of the logs were not that straight".
There was also a big range in the diameter of the logs.
"They were clearly not of the quality of North American, Canadian or Russian logs," he said.
But while the higher-quality Russian red pine logs of 30cm diameter cost about $US200/cubic metre, NZ radiata was selling for about $US130/cubic metre in the wholesale market.
"New Zealand radiata pine logs have a very good fit in the Chinese market, but that fit is related to price, not so much quality," Van Leeuwen said. "Price is the main consideration".
Russian logs - whether larch, pine or spruce - sold for $US155-$US165, with higher prices for better logs. comparable hemlock and douglas fir logs from Canada and the US northwest were $US140-$US145, while NZ logs were selling for $US125-$US130.