Returns to small growers may be lower than those recorded here owing to scale and buyers' margins. These log prices are historical and indicative only and may not correspond to actual prices paid, or grades used, in market transactions. A "best fit" is applied by survey respondents to align company log grade specification with the generic specifications. Direct comparisons with actual market prices may not apply, due to differences between the specification sets. The prices are subject to changes when further data become available. The sources for this information are Ministry for Primary Industries industry contacts.
2nd Quarter and 12-Quarter Average
As at: June 2013
|
Generic log type & pricing point |
Jun-13
quarter |
12-quarter
average |
|
EXPORT (NZ$ per JAS m3 f.o.b.) |
|
Pruned |
169-209 |
171 |
|
Unpruned A Grade |
136-153 |
125 |
|
Unpruned K Grade |
114-147 |
117 |
|
Pulp |
108-123 |
110 |
|
DOMESTIC (NZ$ per tonne delivered at mill) |
|
P1 |
142-158 |
139 |
|
P2 |
121-133 |
120 |
|
S1 |
103-110 |
100 |
|
S2 |
101-107 |
96 |
|
L1 and L2 |
88-105 |
89 |
|
S3 and L3 |
83-100 |
83 |
|
Pulp |
46-51 |
51 |
r = revised; n/a = not available
The log price collection process
The Ministry for Primary Industries (MPI) collects log prices more to analyse trends than for marketing purposes, so it does not collect spot prices, day-to-day prices or one-off sale prices. All data published are historical, usually on a monthly or quarterly basis.
MPI uses three sources of information for collecting radiata pine log prices:
-
Surveys of a selection of major New Zealand log suppliers for indicative domestic and export log prices. These are published quarterly on MPI's website.
-
The Japan Lumber Report for A and J grade export prices.
-
An Overseas Trade Price Index for Exports of Logs, Poles and Sawn Timber based on exporter declarations, published quarterly in MPI's Statistical Releases.
Export log grades are typically measured in Japanese Agricultural Standard (JAS) cubic metres. A JAS measures logs according to prescribed formulae. Domestic logs are typically measured in cubic metres or tonnes. Conversion factors between all three measurements vary owing to a number of variables including wood age, log size and taper, but are mostly within 90 percent of a 1:1 relationship. Conversion factors are assumed to be 1:1 on this website.
Log prices can be quoted at a number of different pricing points, such as "cost insurance freight" (or c.i.f., i.e., landed at an importing port), "free on board" (or f.o.b., i.e., loaded onto a ship at an export port), wharf gate, on truck and at stump. Export margins charged by New Zealand's log buyers can range from 4 to 15 percent of a landed price at wharf.
Log prices can vary depending on exchange rates, log measurement methods and log grade specifications. Log grades have also changed over time. Some industry commentators say log size has decreased within grades (both in small end diameter and length) but log quality is perceived to be increasing (particularly clearwood depth in pruned logs). Log prices quoted on MPI's website should only be compared with other prices with these factors in mind. Prices should be based on a common pricing point.
Log Grade and Prices
A number of log grades have been selected to represent the overall log market. For the export market these are Pruned (to Japan and Korea), A (Japan), J (Japan), K (Korea) and pulp grades. For the domestic market these are pruned (P1, P2), unpruned (S1, S2, L1 & L2, S3 & L3) and pulp as defined by Forest Research, and run-of bush (a mixture of grades, generally unpruned). To see the log grade specifications click here.
Log grade specifications can vary significantly between suppliers, even within a particular grade. For example, K-grade log specifications may vary in length, small end diameter and allowable knot size. This is even truer of domestic grades, where the Forest Research log grades used by MPI have not been universally adopted by the industry.
To help overcome the situation, MPI relies on industry sources to provide log prices to the nearest log grade equivalent, and to identify any significant changes to log specifications.
Prices in the Japanese market are generally set quarterly, Korean prices are commonly set shipment by shipment, and mechanisms for other export markets vary. There is no standard time frame for reviewing domestic prices, which tend to fluctuate depending on the nature of sale agreements. MPI only records average log prices from its industry contacts on a quarterly basis.
Export prices are usually provided by industry sources in Unites States dollars, which MPI converts to New Zealand dollars using a quarterly exchange rate. MPI uses f.o.b. as the pricing point for export prices, while the domestic pricing point is "landed" or "delivered" at mill. This means MPI has to make some assumptions about costs if the log prices provided by the industry are to another pricing point. Prices are initially collected from individual companies, but the data are destroyed once these have been aggregated and averaged, to retain confidentiality.
Where possible, the quarterly figures encompass a range of log prices for each grade, rather than a single figure. This reflects the range of prices associated with each grade and helps preserve the anonymity of individual company data. MPI uses a mid-range price in analysing these data. While a volume-weighted average price based on each company's production would give a better measurement of actual prices, volume data are not readily available.
A new feature appearing with MPI's quarterly log prices is the 12-Quarter Median price series. MPI's 12-Quarter Median prices are derived using the median prices of each log grade, averaged over the last 12 quarters. This price series will tend to buffer the effects of extreme spikes of troughs, which can occur from time to time and tend to distort trends in the short term. This feature will be useful to those interested in analysing longer term price trends.
Availability of log price information
MPI's log price information is available from a number of sources. Radiata pine log prices sourced from industry contacts are published quarterly on MPI's website. These data are also available by agreement on Forest Research's Woodwide database. A and J grade prices (sourced from the Japan Lumber Report) are available free of charge from the Ministry and the Overseas Trade Price Index is available through MPI's Statistical Releases by quarterly subscription.
MPI's general policy is that indicative and aggregated information on log prices is freely available wherever possible and can be quoted provided the source is acknowledged.
Acknowledgements
MPI acknowledges the assistance of the forestry and sawmilling companies in preparing and supplying radiata pine log prices.