Browse > Home / Lead / Woodchip export price maintained

Woodchip export price maintained

Posted on July 1, 2009, 3:03pm

The bluegum sector has received a welcome boost with negotiations securing maintenance of the existing export price for Australian plantation hardwood.

Port of Portland chief executive Scott Paterson said a price drop had been expected due to “supply and demand issues” in the current economic climate.

The agreed price provides an attractive margin for the industry when felling, chipping and transporting costs are taken into consideration, according to Mr Paterson.

“Money doesn’t grow on trees, but it certainly grows in them,” he said.

ITC Limited concluded negotiations this week to maintain the benchmark bluegum chip export price for the second half of 2009 at $207.40 per on-board dry metric tonne.

The news is expected to provide some relief for investors grappling with the collapse of Timbercorp and Great Southern, which together managed more than 110,000 hectares of Green Triangle blue gum plantations that could be sold off.

ITC manages 31,000 hectares of bluegum plantations in the Green Triangle, including 6000 in South Australia.

The company’s chief executive, Vince Erasmus, who led the price negotiations on behalf of Australian hardwood producers, said maintenance of the export price was an “extremely positive outcome given global economic conditions”.

“To maintain price in these circumstances is very heartening for growers and investors and a telling reminder Australian certified plantation grown woodchip is a valued commodity in our major export markets,” he said.

“We are naturally very pleased ITC has been able to retain 2008 level pricing and the certainty this provides growers and investors.”

He said Australia’s proximity to Japan compared to international competitors, the superior quality of bluegum compared to other species, and positive medium to longer-term outlook for plantation woodchip had been recognised in negotiations.

“The price for certified plantation based hardwood woodchips continues to reflect the premium paid over native forest based woodchips,” Mr Erasmus said.

“Consistent with the decline in economic activity in Japan, the volume of woodchip exports was less than expected in the first half of 2009, however ITC are greatly encouraged by signs of recovery.”

Mr Paterson said many trees in the region would reach maturity within a few years and the estate continued to grow, despite the financial troubles of Great Southern and Timbercorp.

However, he acknowledged infrastructure was still lacking for export of bluegums after the port pulled out of multi-million dollar facility construction plans in October last year due to concerns over the financial position of timber companies.

“We are working to make sure infrastructure is available when it is needed,” he said.

Tags: , ,  

Comments

One Response to “Woodchip export price maintained”

  1. John Seaton on July 20th, 2009 3:40 pm 1

    Thanks, good article of Jul. 1 which have just read.
    I have about 12 Ha of bluegums; been in the ground in the South East of SA for about 9 years, so I’m interested.
    Do you have a graph showing the fob price trend for export bluegum woodchip, over the past say 12 years?
    Thanks John Seaton.

We welcome your comments on this story. Comments are submitted for possible publication on the condition that they may be edited. We require a working email address - not for publication, but for verification.