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Australia's forest industry shows resilience in difficult year.



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29 November 2006

Australia’s forest industry shows resilience in difficult year

Despite weak housing activity, a moderating domestic economy and

competitive export markets, Australia’s forest industry has managed to

maintain, and even increase, output in some sectors, according to a new

ABARE report.

The report, Australian Forest and Wood Products Statistics, was released

today by Mr Phillip Glyde, Executive Director of ABARE.

The total volume of logs harvested from Australia’s forests fell to 27 million

cubic metres in 2005-06, because fewer logs were harvested from native

forests.

‘In spite of this, log prices increased enough to offset the lower volume, and

the overall value of logs harvested actually increased for the year,’ Mr Glyde

explained.

Despite soft domestic demand, the softwood sawnwood sector managed to

record a 2.1 per cent increase in production. This was achieved by replacing

imports from New Zealand with domestic production as well as the

development of new export opportunities in Asia.

‘Although sawnwood exports are coming from a fairly low base, they have

doubled in value over the past five years. And we’re moving away from the

traditional markets of Japan and the United States toward economies such as

China, just as we’re seeing in many other industries,’ Mr Glyde said.

However, most of the rise in exports came from lower value softwood

roughsawn sawnwood.

Mr Glyde also pointed to the expanding hardwood plantation sector as

contributing to the industry’s strength.

‘The volume of timber from these forests increased by almost 29 per cent

over the year, mostly for woodchip export, and we expect continuing strong

supply growth in coming years as many of these plantations reach maturity.’

Nevertheless, this masked the sharp decline in native hardwood and

softwood woodchip exports, particularly to Japan. This reduced the volume of Australia’s woodchip exports by 4.2 per cent in 2005-06, although the higher

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prices received for plantation woodchips cushioned the impact, and the value

of woodchip exports fell by only 2.2 per cent to $839 million.

In releasing the report, Mr Glyde acknowledged the support of the Forest and

Wood Products Research and Development Corporation.

For media interviews and comment, please contact Kevin Burns, economist, on 02 6272 2253.

For free downloads of the report Australian Forest and Wood Products Statistics: March and June quarters 2006, please visit the ABARE web site www.abareconomics.com or phone Publications on 02 6272 2010.

For general media enquiries, contact Maree Finnegan, Media Coordinator on 02 6272 2260, mobile 0417 689 567 or email mfinnegan@abare.gov.au

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