Wood prices

The Herald reports:

’s outspoken economic development spokesman has lashed out at “arrogant” foreign owners of New Zealand’s forests, saying their pursuit of the highest possible profits comes at the expense of local workers, communities and the wood processing industry.

Jones’ comments come as he and industry figures ring alarm bells that local processors are being priced out of the log market as skyrocketing Chinese demand drives prices higher.

So the global price of wood is increasing. I’m not sure this is a bad thing for a country that produces wood.

Jones seems to be saying that owners of NZ forests should refuse to take the highest price for their wood, and should sell locally for a cheaper price.

I wonder if this logic extends to all industries? Should all companies be told they are not allowed to accept a high foreign price for their products until they have sold all they can domestically?

“These foreign-owned companies rely on ratepayers to upgrade roads so they can move their logs to the ports, they rely on New Zealand’s social insurance when workers in the forests are killed.

Neither of these statements are true. When logs are moved on roads, they pay for the costs of maintaining and upgrading roads through road user charges. They pay up to $368 per 1000 kms.

Forest companies also pay ACC. Their levy rate is $6.35 per $100 of wages. This is set to cover the costs of accidents and deaths in that industry.

“The foreign owners’ agenda has eclipsed the rights and interests of the New Zealand taxpayer and workforce, this is not a sustainable forest policy.”

Jones is good about complaining, but does he have a solution? Is he saying Labour will pass a law to ban companies from selling goods overseas if they can be sold cheaper in New Zealand?

Hancock did not return the Herald’s calls but Forest Owners Association president Paul Nicholls said owners were looking for the best return on their investment.

“Most forest owners sell somewhere between half and two thirds of their product to domestic mills but there’s always competition for those logs from overseas buyers, so it does come down to a matter of economics, which markets the domestic mills are selling into and what they can afford to pay for logs.”

The global price of wood is high and rising. I don’t see you can do much about that.


Comments (25)

Login to comment or vote