Friday Offcuts 24 May 2013
The budget unfortunately in Australia delivered less than expected. It was hoped that the Australian Government would be able to do more to encourage the growth of regional manufacturing, specifically for the forestry, wood and paper industries. The opportunity was missed though last Tuesday. The AU$429 million allocated to the Carbon Farming Futures program and the inclusion of AU$500 000 to develop an FSC Standard for Australia (as part of the funding set aside for the Tasmanian Forest Agreement) has though been well received by the industry (see story below).
A couple of updates on upcoming technology programmes for you. In a story last week we outlined a new programme, MobileTECH Summit 2013 being run in New Zealand on 7-8 August. It's covering new and emerging technologies relating to mobile communications in our primary industries. Forestry is a key component of the programme. Updates by all of the major technology and mobile communications providers along with other primary industries will be providing forestry companies with a rare insight into opportunities open to them in their own businesses. The programme has just been completed this week. You can check it out by clicking here.
The other update is on September’s WoodEXPO 2013 event. Registrations have started to flow in from wood products companies in both countries with registrations going live this week. Interest also has stepped up another notch for the last few remaining stand spaces in both Rotorua and Albury. Check out the latest extensive listing of participating companies on the event here. It’s already very impressive. However, if still wanting to be involved in the EXPO as an exhibitor in either country, please get back to email@example.com ASAP to avoid any disappointment. Any last remaining stands will be filled on a "first come - first served" basis.
This week we have for you:
New FWPA Softwood Timber Survey is onlineFWPA’s new Statistics and Economics Program has launched its first service – the Softwood Timber Survey (STS). The survey tracks monthly sales volumes by product categories for Australian plantation softwood products from participating companies. There are 7 major categories, with various sub categories tracked for each.
Participating companies log into the survey portal each month to upload their sales volumes. Companies can then view their figures against the aggregate for each product category and download reports. Summary aggregate data is publicly available for plantation softwood product sales volumes by year and product category dating back to 2002.
“This is an important first step in establishing industry statistics services and gives us an opportunity to expand the dialogue with industry about the data they want collected and how they want to use it” said Jim Houghton, FWPA Statistics and Economics Manager.
The survey was previously managed by AFPA. With the creation of FWPA’s Statistics and Economics Program stakeholders agreed that moving management of the survey to FWPA would provide the opportunity for more companies to contribute to the Survey each month.
Work is progressing on providing a similar service for Hardwood Timber Products and Industry production and Inventory data. Through this confidential data aggregation process it is expected a more accurate understanding of current commercial conditions will be available. You can visit the survey by Clicking here.
NZ log export updateMarch was the largest month for log exports from New Zealand on record. Not only did the volume exported exceed the largest previous month, but it was over this by almost 15% at a total just exceeding 1.5 million m³. Obviously the largest portion of the volume went to China, where it was also the largest export month on record to that destination. Exports to Korea were respectable at 235,000m³ and exports to India had a big increase to 126,000m³.
While exports from most ports have been on the rise lately with more logs going to China, the most rapid increase has been from Whangarei where the share of exports from New Zealand has increased from around 17% in the quarter to March 2012 to 28% in the quarter to March 2013.
China’s imports are continuing at high prices and high volumes. The economy has slowed slightly in the first quarter of 2013, though how this affects exports to China is unclear. There has not been much sign of slowing of exports to the country so far. China’s importers have been following the US lumber market in anticipation of short supplies though this is yet to kick in with imports from the Pacific North West ticking along steadily.
China’s total rolling quarter log imports have increased 6% year-on-year and most of this has come from a 40% increase of imports from New Zealand. There has been a large increase from the US, though imports from Canada have remained steady over the year. However, imports from Russia have decreased 22% year-on-year, which is a very significant drop from the number one log supplier, and as this trend continues China will still make up volume from New Zealand and the Pacific North West.
south Korea South Korean imports have been relatively steady for the past year, in which New Zealand has had over 50% share of the log market for the 9 months from July through to March. In this time, the average price of logs from the Pacific North West going to South Korea has risen by 36%. This is due to the decreasing supply of cheap hemlock logs from Canada and the United States.
In the first quarter of this year the South Korean economy grew by its fastest rate in two years, though its government continue to be worried by sluggish exports. The Japanese aggressive currency devaluing is giving them a competitive advantage for exports, which is a concern for the Korean economy which is heavily based on exports. The central bank has lowered interest rates in an attempt to boost exports. This means that margins on input costs for construction, such as logs from New Zealand, will become tighter and may hurt log imports in the short term.
Shinning a light on treated pine timberThe Australian building industry relies on pine timbers for house framing and construction, and for regions where termites or borers might be active timbers treated with a preservative to H2 level (i.e. above ground, inside use) are required.
A research team from CSIRO, with funding from Forest and Wood Products Australia (FWPA), has demonstrated that Near infrared (NIR) spectroscopy can assess the amounts of preservative in H2 treated timber cheaply, quickly and accurately.
The researchers measured the NIR response pattern from timber samples with known but different concentrations of preservative to create a calibration chart. They then compared their models with samples from operating mills to see how accurate both the NIR method and the mill assessments actually were.
The research took over a year, but the results show NIR can deliver accurate and timely results. Using NIR it takes about 30 seconds for a worker to know the concentrations of preservative at a given depth inside the wood. Having a quick, cheap and accurate assessment method means, in the future, manufacturers will be able to readily adjust their production processes to make them as economically efficient as possible.
For more information on this story, check out this month's R&D Works Newsletter
VicForests to reduce harvest levels in Victorian ash forestsVicForests has announced timber harvesting in Victoria’s Ash forests will be reduced from 2017. CEO, Robert Green, said VicForests’ 2013 Resource Outlook outlines a transition to lower harvest levels in Ash forests.
“This reduction is a direct result of the impact of large scale bushfires on areas of forest available for timber production,” Mr Green said. “Our annual Resource Outlook provides updated information regarding the timber resources in Victoria’s State forests.
“Previous Outlooks have projected the sale of 300 000 cubic metres of high quality Ash sawlog per year, but this year’s Outlook has revised this figure to 215 000 cubic metres per year - a reduction of more than 25%. This change will come into effect from July 1, 2017.
“We have publicly acknowledged the need to reduce harvesting in Ash forests as a result of bushfire and this adjustment is being made ahead of the first major sales process since the 2009 bushfires, planned for later this year. The change ensures future harvesting will continue at a sustainable level and future timber sales will be based on the reduced volume.”
Mr Green said VicForests will continue to work closely with the industry to assist them in adjusting to the new level of resource availability.
Elders sells 3,200 hectares of timber propertiesElders has sold 3,200 hectares of timber property in north Queensland to the country’s largest banana grower for AU$10 million, The Australian Financial Review reported on 13 May. The purchase of the teak tree properties Gold Tyne and Mount Ray outside Cooktown was at a discount of about 40%, according to the news story, a version of which also appeared in Queensland Country Life.
Forestry operations are classified as a discontinued operation by Elders, which recently sold AU$29 million-worth of Indian Sandalwood projects on behalf of managed investment schemes for which Elders Forestry Management was the responsible entity, The Australian Financial Review reported.
Emissions windfall drops … by millionsNew Zealand’s emissions “windfall” has fallen to just NZ$3 million because forests are being converted to dairy farms. The position is better than the billion-dollar liability that the Labour Government was predicting in 2008, but still a far cry from the more than NZ$400 million the National Government predicted in 2011 reports Carbon News.
The figures come from analysis of New Zealand’s net emissions position for the first commitment period of the Kyoto Protocol, 2008 to 2012. In 2008, it was expected that New Zealand would face a 45 million tonne liability at the end of CP1, with an estimated cost of NZ$1 billion. That switched to a 9.6 million tonne surplus worth NZ$225 million when the figures were estimated in 2009.
By 2011, officials were predicting a surplus of more than 25 million tonnes, expected to net the country up to NZ$444 million. But that revenue was based on a carbon price of up to $19 a tonne, which even then was out of date. Since then, revenue expectations have fallen on the back of tumbling carbon prices.
However, New Zealand’s expected net emissions position has remained constant at around 35 million tonnes since the middle of last year. That is until now. The most recent figures available from the Ministry for the Environment show that between February and March this year, New Zealand’s net position fell from 35.2 million tonnes to 29.6 million tonnes. Using a carbon price of 9 cents a tonne, Treasury has said the surplus is now worth just NZ$3 million.
Officials say that the drop is largely due to increased deforestation from a combination of very low carbon prices and favourable prices for dairy products. World carbon prices have fallen from NZ$13 per tonne CO2-e in late 2011 to NZ$0.19 per tonne in January 2013. This has made conversion of pre-1990 planted forest to other land uses more economically viable.”
A survey by the Ministry for Primary Industries last year showed that forest owners intend to deforest 32,000 hectares of planted production forest over CP1, up from the intended 13,000 hectares reported at the end of 2011.
Source: Carbon News 2013
More funding for Tasmanian forestry peace dealThe Commonwealth Government will provide an additional AU$94.5 million over five years to help implement the Tasmanian Forestry Agreement. The additional money comes from funds redirected out of the billion-dollar Biodiversity Fund, as well as the Caring for Our Country program's environment stream.
The Commonwealth's funding includes AU$60 million over the three years from July last year, in "structural adjustment" payments. These will go to sawmillers and haulage and harvest contractors who exit the native timber industry, as well as government buybacks of wood supply contracts and to support nature-based tourism.
Other funding includes: an Innovation and Investment Fund for the Tasmanian plantation timber industry (funding of AU$15.8 million over three years beginning in July 2013) to help the industry transition to a greater reliance on plantation resources, AU$8 million over the next three years to complete a study underway looking at "appropriate ongoing solutions" for the use of timber residues, or waste products and AU$2 million per year, starting in 2014-15, to assist in the ongoing management of the new forest reserves created by the Agreement.
AU$500,000 to develop national FSC standardThe Chief Executive of the Australian Forest Products Association, Mr Ross Hampton has expressed disappointment in this year’s Budget speech by Treasurer Wayne Swan while noting that there were some good initiatives.
"It was welcome to hear the Treasurer acknowledging the pressure on trade exposed industries from a stubbornly high Australian dollar and allocating AU$429 million to the Carbon Farming Futures program, noting that work still needs to be completed to include plantation forestry in the Carbon Farming Initiative."
"We also welcome confirmation of funding for industry restructure as part of the Tasmanian Forest Agreement which includes an allocation of AU$500 000 to develop an FSC Standard for Australia. This will give Australia’s highly regulated forestry industry two voluntary certification schemes and we await similar financial support for the Australian Forestry Standard."
"AFPA’s members were hoping however, that the Australian Government would do more to encourage the growth of regional manufacturing and specifically the forest, wood and paper industries."
Costly biodiversity measures undermine sustainable developmentA new study published by the Centre for International Forestry Research (CIFOR) suggests that forcing timber and plantation companies to carry out costly and time-consuming biodiversity surveys actually undermines conservation efforts. In addition, CIFOR has released new research that demonstrates the importance of land tenure in promoting sustainable development outcomes.
Forest management systems such as the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC), each require the detection, identification, and management of endangered or protected species. Such systems are designed to enhance the protection of biodiversity as well as promote sustainable development outcomes.
However, such resource-intensive surveys are actually undermining conservation efforts, due to the large burdens they impose on forest enterprises. Erik Meijaard and Douglas Sheil, the authors of the new CIFOR study, believe that such management systems are driving away companies that are genuinely committed to conservation, whilst allowing less scrupulous commercial ventures to fly under the radar.
The authors note that 30 per cent of the world’s forests are currently managed by timber, mining and other companies, which is four times greater than the forest area designated for conservation management. Much of the world’s biodiversity therefore resides in these timber concessions. This has prompted the authors to argue for conservationists to work more collaboratively with commercial entities and find business-friendly solutions to enhance biodiversity and conservation outcomes: "Logging concessions have got to be a crucial part of forest management," says Meijaard "many protected areas really are just pure paper parks – they exist in paperwork alone."
Source: AFPA Canopy
Space Mission to measure biomass given go-aheadThe European Space Agency's (ESA) Earth Observation Programme Board has given the go-ahead for a new €400-million Earth-observation mission that will measure global forest biomass in unparalleled detail.
The mission, called BIOMASS, is scheduled to launch in 2020 and will produce the first accurate maps of tropical, temperate and boreal forest biomass from space. These maps will help scientists address fundamental questions about changes in biodiversity, especially in tropical regions, where ground data is scant. They'll also help put a figure on the carbon emissions resulting from deforestation and land-use change.
Currently, estimates of biomass used in climate models come from ground-based measurements. But because these measurements are scarce, the models give radically different projections of future climate. The BIOMASS mission will help overcome this problem, by providing a database of accurate, calibrated biomass measurements, bringing current climate models into line with each other. It will do this by using a 70-centimetre-wavelength radar sensor to probe both the height of trees, and the size of their trunks and canopies, in minute detail. More >>
Biodegradable nappies from recycled cardboardBiodegradable nonwovens can be manufactured cost-effectively using a method developed by VTT. VTT Technical Research Centre of Finland has developed a process that enables recycled paper and cardboard to be used as a raw material for nonwovens.
Hygiene and home care products, such as nappies, sanitary towels and cleaning cloths, are among the many items that can be manufactured from the biodegradable nonwovens.
The manufacturing costs of cardboard-based nonwovens are around 20% lower than for nonwovens produced from wood raw materials. The forest industry will be among those likely to benefit from new business opportunities opened up by nonwovens based on recycled paper and cardboard.
Buy and Sell
...and one to end the week on...a few to ponder
Short, sharp and sweat. The Grim Reaper came for me last night, and I beat him off with a vacuum cleaner. Talk about Dyson with death.
And on that note, lets hope the weather improves for a great weekend. Cheers.
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