WoodWeek – 22 June 2022

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Welcome to your good wood news source for one last look at log markets and the last laugh. Today’s bad news is that, after over 22 years, and a whopping 676 issues this is our last issue. Our WoodWeek content and your subscription will be merged into Friday Offcuts from next week. Of course our classified advertising service will still be available for job vacancies, tenders, equipment for sale there as well. Our log export market updates, thanks to PF Olsen, Forest360 and Champion Freight, and our SnapSTAT features, thanks to Chainsaw & Outdoor Power and Oregon, will continue in a new section on Friday Offcuts.

The good news is that you don’t have to do a thing; your WoodWeek subscription will automatically be transferred to a Friday Offcuts subscription unless you are already a subscriber, or you choose the opt-out option coming to you in a separate email. On behalf of our WoodWeek team and me personally, as editor, we would like to say a big “Thank You” for your support in its many forms over these past 22 years. We look forward to bringing you the more pithy industry and market news through Friday Offcuts.

Staying with positive vibe this week we would like to acknowledge and thank all of you who are registering for our upcoming events! We continue to see very strong registration numbers for all of our upcoming conferences and pre-conference workshops (click below for full details):
• Environmental Forestry Conference on 28-29 June More >>
• Residues to Revenues Conference on 26-27 July More >>
• Carbon Forestry Conference on 9-10 August More >>

On to the main business of the day: log export markets – Thanks to the team at PF Olsen for their inventory update on logs into China. China softwood log inventory has risen steadily to 5.6m - Considering significant parts of China have been in lockdown, log offtake is still a relatively healthy 70k per day. Activity this May is similar to the last two Mays, but not as high as pre-Covid times when daily log offtake at ports ranged between 85-100k.

Moving to new markets: EKOS launches new biodiversity market - A new biodiversity market was launched this week with the first transaction of biodiversity units between Sanctuary Mountain Maungatautari (the seller) and Profile Group Limited (the buyer). The mainland ecological island is now able to raise funds for conservation management from the sale of biodiversity units through the newly minted Ekos Sustainable Development Units Programme.

To finish with another key market, we’ve got the latest Carbon Match Market Update for you. The 15th June auction cleared at $76. Last week's Government NZU auction has just taken place, clearing at $76.00. That represents a solid result, at a slight discount to the previous month's average Carbon Match Last/Settle of $76.69.

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PF Olsen: Log Export Market Update

(Wood Matters) China softwood log inventory has risen steadily to 5.6m - Considering significant parts of China have been in lockdown, log offtake is still a relatively healthy 70k per day. Activity this May is similar to the last two Mays, but not as high as pre-Covid times when daily log offtake at ports ranged between 85-100k. The CFR price for A grade logs has ranged between 155 and 165 USD per JASm3 during May.

The Chinese economy has been battered by Covid-19 lockdowns. The April Caixin China Manufacturing PMI fell to a 26- month low of 46.0. Both output and new orders fell at the second steepest pace since records began in 2004. Export orders were at the lowest level in two years.

However, there are signs of recovery as lockdowns ease. In Shanghai, Covid-19 test requirements for people entering public places will not be required from June 1. In the last week of May, Chinese investors have snapped up shares of companies that are positioned to benefit from the resumption of normal economic activity. Local Shanghai officials have said they will accelerate approvals for property projects. In addition to this, the State Council (China’s cabinet) has released a 140b yuan (21b USD) package of tax rebates and loans in an effort to stimulate the Chinese economy. This will increase log demand, although China is entering the hotter months when productivity usually slows down. There are promising signals for increased demand from August onwards.

India - About nine bulk shipments of logs are expected in Kandla port in June; five from Uruguay, three from Australia and one from the USA. Demand is still struggling in this area due to a lack of container shipping space for exports which in turn reduces the requirement for pallets. There are containers of USA SYP logs unsold and afloat to Mundra port. This will only increase the pressure on the price. Log buyers also fear demand will fall further in June with monsoon rains forecast to arrive.

More >>

Source: PF Olsen

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China Economic Update

Story 2 China Economic Update 2022 Q1 - China’s Gross Domestic Product (GDP) expanded by 4.8% in the first quarter of 2022 from a year earlier, topping expectations of a 4.4% increase and picking up from 4.0% in the fourth quarter of 2021. However, the domestic spread of the Omicron variant of COVID-19 in cities such as Changchun, Shanghai and Shenzhen have led to a tightening of pandemic-control measures in March, which has not been fully captured in the first-quarter data and might threaten economic growth in the months ahead.

China Construction Sector - According to the National Bureau of Statistics (NBS), the average new home prices in China’s 70 major cities rose 1.5% and easing from a 2.0% gain in February, pointing to fragile demand as growing Covid- 19 lockdown measures dampened consumer confidence. This was the weakest rise in new home prices since November 2015, as Beijing’s deleveraging campaign in 2021 triggered a liquidity crisis in some major property developers. Over 60 cities have eased curbs on home purchases to support the ailing property market as the surge in Omicron cases and strict lockdown measures have again cooled demand in many cities.

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Source: Canada Wood Group

More on chart data from ceicdata.com >>

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EKOS launches new biodiversity market

A new biodiversity market was launched this week with the first transaction of biodiversity units between Sanctuary Mountain Maungatautari (the seller) and Profile Group Limited (the buyer). The mainland ecological island is now able to raise funds for conservation management from the sale of biodiversity units through the newly minted Ekos Sustainable Development Units Programme.

These biodiversity units will fund the conservation management of 83 hectares at Sanctuary Mountain Maungatautari for the 2022 financial year, according to Sanctuary Mountain Maungatautari CEO Phil Lyons.

“We have to fundraise every year to reach our annual operating budget, and this has typically focused on Visitor Revenue through education programmes and Ecotourism, Philanthropy, Community Grant Funding, Corporate, Local and Central Government Partnerships. Now we have an opportunity to raise funds in a market environment from businesses that want to embed biodiversity into their value chains,” Lyons said.

Mikayla Plaw, Executive Director of Organisational Development and Sustainability at Profile Group (parent company to APL Window Solutions and their other supply chain businesses) is delighted to be an early adopter in this new biodiversity market. “This is a fantastic way for us to deliver on our business responsibility and impact reduction goals as well as supporting a truly meaningful local project. Being able to purchase biodiversity conservation outcomes off the shelf through a transparent funding instrument is a unique offering. We are proud to be involved”, she said.

This transaction was made possible by Ekos through its new ‘Sustainable Development Units Programme’ developed with funding support from Trust Waikato, the Wel Energy Trust, and the D.V Bryant Trust.

Ekos founder and CEO Dr Sean Weaver said he developed this market-based conservation financing mechanism to unlock a new source of private sector money for conservation.

“The delivery of the UN sustainable development goals will require US$6.9 trillion in investment annually. It is a mathematical and financial certainty that there is not enough money in philanthropy and taxpayers’ pockets to meet this funding challenge” Weaver said.

“But the global fund management industry is projected to transact US$145 trillion by 2025 which means that (in theory) there is more than enough money in the private sector to look after the place. In practice, one has to create a robust structure for market transactions, and this is what we have done with our Sustainable Development Units Programme. The proof of concept is this first trade that we are celebrating today”, he said.

The integrity of this biodiversity market programme is based on an environmental markets quality system, including a standard and methodologies developed by Ekos and validated by environmental auditing firm McHugh & Shaw ltd.

“This conservation financing programme does not put a price on nature. It puts a price on the human labour and technology cost to look after nature”, Weaver said.

See more about EKOS >>

Sean Weaver, CEO of EKOS is speaking on “Carbon Financed Indigenous Reforestation for Climate Resilience” at our Carbon Forestry Conference in early August. More >>

Source: EKOS

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Forestry issues standoff says Maori leader

(Newshub) Forestry issue could become new foreshore and seabed - Maori leader - Maori say a standoff with the Government over the rights of forestry leaders to plant whatever trees they want on their own land has the potential to be the next Foreshore and Seabed controversy.

The Government is urging Maori to move from pine and other exotic species to native forest.

But many Maori have already planted pine in response to the Government’s one billion trees target and are collecting more carbon credits from the fast-growing forests than they could with natives and they don’t want to switch.

"What is going on, what is being proposed, we see as the Labour government's next Foreshore and Seabed moment," Chris Karamea Insley, Chair of Te Taumata said.

Back in 2004 the Helen Clark government extinguished Maori customary title to the Foreshore and Seabed.

Insley believes there are very strong parallels.

"The Government proposing to legislate away the rights of Maori landowners to make their own decisions about what we can and can't do on our land, it is significant, it is a watershed moment for this current government if they proceed down this course," he told Newshub.

Last week, Māori leaders and foresters met with Government Ministers about proposed changes to exclude the future permanent plantings of exotic forests like radiata pine from the Emissions Trading Scheme.

It’s estimated if the Government goes ahead with the legislation it's a $7 billion dollar loss to Aotearoa’s economy.

Already Māori are prepared to go to the High Court and the Waitangi Tribunal and various iwi are concerned that the change will breach their Treaty settlements.

"Part of the Treaty settlement was counting on this capability and this ability to sustainably develop the land with exotics in the permanent category to provide a wealth generation engine for their Treaty settlement," Ngā Pou a Tane - National Māori Forest Association chair Te Kapunga Dewes said.

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Boost for NSW farm forestry

(NSW)Record $28 million boost for farm forestry - The NSW Government has unveiled a record $28 million Farm Forestry package as part of the 2022/23 State Budget to bolster on-the-ground support for producers, drive innovation and promote best practice in sustainable farm forestry businesses.

Deputy Premier and Minister for Regional NSW Paul Toole said the funding boost follows the introduction of new Farm Forestry Codes of Practice earlier this year, and provides increased support to farmers through enhanced education and training.

“This investment will fund a suite of programs and partnerships to facilitate and expand the development of the State’s sustainable Farm Forestry industry,” Mr Toole said.

“This is the largest investment in Farm Forestry in more than a decade, and it reflects the increasingly important role it will play in supporting our sustainable timber industry.”

Minister for Agriculture Dugald Saunders said the investment would provide farmers with practical advice and support services to ensure forestry becomes a part of future farm planning.

“Our Australian-grown timber products are something we should all be very proud of, however access to timber in our state forests has been constrained over the last few years due to fires and floods,” Mr Saunders said.

“This investment will put NSW farmers in the box seat to produce timber to be sold domestically, which will not only directly address timber shortages, but also increases and diversifies income streams for farmers after a tough few years.”

This announcement follows the NSW Government’s recent introduction of new Farm Forestry Codes of Practice (formerly Private Native Forestry) that will ensure long-term sustainability for the industry and provide robust environmental protections across the NSW private forestry estate.

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Source: Deputy Premier, Minister for Agriculture (NSW)

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SnapSTAT: MPI Forestry Exports Forecast

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Source: MPI Situation and Outlook for Primary Industries, June 2022

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NZIF Awards Applications Open

Applications are invited for the awards and scholarships offered by the NZIF Foundation. for 2022. The total value of awards offered is $24,700.

The awards open for application are:
• A Future Forest Scholarship for post graduate research of up to $10,000
The New Zealand Redwood Company Scholarship of $5,000 for an undergraduate scholarship at the University of Canterbury School Forestry
• Otago Southland Awards to a total of $5,200 to assist project for forestry in the region
• A Mary Sutherland Scholarship of $1,000 for a polytechnic student
• A University Undergraduate Scholarship of $1,000
• A Frank Hutchinson Postgraduate scholarship of $1,000
• Student poster prizes at NZIF Conference (1st, 2nd and 3rd prizes of $800, $500 and $200)

Applications are now open. For more details and an application form click here.

Applications must be received by the Foundation administrator (foundation@nzif.org.nz) by 5pm on Monday, 22 August 2022. Winners will be announced at the Awards Dinner at the NZ Institute of Forestry conference in Auckland on 11-13 September 2022.

Enquires to the Foundation (foundation@nzif.org.nz) or call 04-974-8421.

Membership of NZIF is not a requirement for application.

About the NZIF Foundation - The NZIF Foundation was established in 2011 by the NZ Institute of Forestry to advance education in relation to forestry. This includes encouraging and supporting forestry related research, education and training through the provision of grants, scholarships and prizes; promoting the acquisition, development and dissemination of forestry related knowledge and information and other activities that do not conflict with the charitable purpose.

For the purposes of these awards, forestry is broadly defined to include all those activities involved in the management and use of forests and their products, the objects of which are the production of wood or other forest benefits and the maintenance of the environment in its most beneficial form. All forests in New Zealand, whatever their purpose, are encompassed in the definition.

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Carbon Match: The State of things

Carbon Match Market Update: 15 June Auction Clears at $76 – Last week's Government NZU auction has just taken place, clearing at $76.00. That represents a solid result, at a slight discount to the previous month's average Carbon Match Last/Settle of $76.69.

A total of 6,131,700 were purchased, comprising the scheduled volume for the quarter of 4.825 million and the residual cost containment reserve of 1.3067m.

The Q1 (March) Auction, at $70 flat, cleared at a significant discount to secondary market spot prices, which on Carbon Match, had averaged $78.53 over the month prior.

Despite this, competition for volume took out most of the cost containment reserve (which is essentially an extra 7 million units buffer for calendar 2022, able to be made available at a trigger price of $70). Some 10.4 million units changed hands at the Q1 auction.

Today's (15 June) auction reserve price was expected to be set by default at $70 as required by regulation, given that the secondary market has sustained well above this level since January this year.

It sees the calendar 2022 CCR fully exhausted with two further auctions to go this year.

While today's auction saw lower overall levels of participation than in Q1, a greater proportion may be disappointed - it has left 17/26 participants successful in procuring some volume, compared with 30/32 in the Q1 auction. There were 316 bids in total, compared to the 477 bids in Q1. Total units bid for today were 10.05 million - a little less than the 11.73m bid for in March.

Auction results are published and available here, with the report from the Auction Monitor to follow hopefully within the next couple of months.

Tune in to our platform to see what happens next - last trade as of writing $77.50.

Source: Carbon Match

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Ponsse develops machine with Klabin

Ponsse develop full-tree harvester with Klabin - Klabin, the largest producer and exporter of paper packaging and packaging paper in Brazil, in partnership with Ponsse, the Finnish manufacturer of forest harvesting equipment, developed a pioneering forestry machine named Harbunk. With technology to fulfill all stages of wood harvesting of the whole tree system (Full Tree), the novelty of the market also increases productivity and lowers the costs of this operation, especially in small areas.

Until then, Klabin carried out forest harvesting in small areas, only by ctl (cut-to-length) system, a format that guarantees operational efficiency in larger areas and requires the use of two machines (Harvester and Forwarder), each responsible for a phase of operation. This process increases the investment of companies and small rural producers, and consequently increases CO2 emissions.

By having a differentiated design, Harbunk optimizes the process, since this single machine can perform the extraction and processing of wood, considerably reducing the costs of the operation, while offering a more efficient and sustainable harvest. One of the main gains is the reduction of lost time with the transport of machines. As it is just a machine, it stays longer in each forest than the cut-to-length or full tree set, reducing the travel time between the harvesting areas and consequently increasing the machine's availability for operation.

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Satellite technology curbs forest crime

(Finland)Satellite surveillance curbs forestry violations in Finland – The first two years of satellite surveillance saw increases in observed breaches of the Forestry Act, but last year the crimes dropped by around 40 percent.

Satellite surveillance of Finland's forests is increasingly helping to uncover illegal forestry practices, according to the state-funded Forest Centre. The surveillance detected nearly 180 forestry offences in 2021, while the previous year monitoring helped to uncover almost 300 offences.

The Forest Centre, a state funded group that promotes forestry and related endeavours, began using satellite images in 2019 to ensure that the forestry sector is following the law.

Satellite imagery helps the group detect forest cuts in which timber purchasers or forest owners have neglected to report such activity, which is required by the Forestry Act. The Act aims to promote "economically, ecologically and socially sustainable management and utilisation of forests in order that the forests produce a good output in a sustainable way while their biological diversity is being preserved."

The surveys are particularly focused on critical areas, such as forests along waterways which are often home to sensitive habitats, according to the organisation. Last year 11 cut sites were found in such areas.

Out of the overall 180 suspected violations observed last year, 66 led to investigations by police. About 80 percent of the suspected crimes were related to foresters not reporting cuts to authorities before they began.

The first two years of satellite surveillance saw increases in observed violations, but last year that development took a turn downward, according to the centre.

More >>

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Almost finally ... A final word from the Editor

As we bring this era of our WoodWorks good news service to a close, I would like to thank the many people who have stepped up to help us bring you the stories, technologies, innovations, people on the move news and the wood market updates that underpin so many of our livelihoods.

Thanks very much to all of you - there are too many to name. Your contributions have been greatly appreciated as our small Innovatek team has grown and developed this news service over 22 years to serve over 3000 subscribers almost every week through the working year.

Looking back to 2009 shows where we've come in the past 13 years - The image below was a political cartoon we created to describe how we saw our industry back in 2009 - an industry pulling in different directions, with the dairy industry depicted in the background as large and unidirectional. Fast forward to today and we can safely say this four- headed waka no longer applies.

Growing public recognition of wood's carbon sequestration value has seen our importance to "NZ Inc" become much clearer; not perfect by any measure, but a long way from the days with a lack of any seriously coordinated efforts. From regional wood councils almost everywhere to the Forest Owners Association working alongside the Farm Forestry Association, we are a much tighter group when it comes to what we mean as an industry and how we can continue to grow in value and social licence in the future by working together and with Government.

So, what's next then? WoodWORKS.news is coming soon! Since 2016 we have been busy building a following for news in the growing mass timber industry for commercial construction. The local uptake of engineered wood technologies of laminated veneer lumber (LVL) and cross laminated timber (CLT) now provides the best carbon sequestration solutions that commercial and multi-residential developers can choose to house people at work, at home and in natural wood surroundings. Watch this space by subscribing at WoodWORKS News . You have my word that we'll "Be Constructive"

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... and finally ... We've got the last laugh for you

Yes, sadly this is your last WoodWeek joke. As we've just had the longest night of the year (yes the days get longer from now on) and some ripper frosts up and down the country, it seems appropriate to compare our attitudes to temperatures to those of the good-natured snow-shoe wearing folks in Canada. Enjoy!

We couldn't let you go without a bit of a gem from the archives - a classic perhaps!

A little boy (let's call him Johnny) had just started school. Little Johnny was doing so well his grandfather took him to the zoo to celebrate.

As they stopped at each enclosure the Grandfather would asked Johnny, "What's this?" It's a Lion," the boy replied. "That’s good," said Grandfather. "And what's this in the next one?" "Its tiger" replied Johnny.

"Well done," said Grandfather "you're so clever. And what's the big one over there." "It's a fricking elephant," said Johnny gleefully. "What did you say," queried the Grandfather? "A fricking elephant," he repeated. "And where did you learn that?" asked Grandfather sternly. "Over there on the sign,” he replied pointing, ”A-f- r- i-can Elephant.”

So, it’s good night from me and good night from all of us on your friendly WoodWeek news team. See you next Tuesday at WoodWorks News for tall timber talk or on Friday next week at Friday Offcuts

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