Australian softwood supply – where to from here?

3rd April 2019

It has been predicted for many years and reality has finally come, Australia is now short of softwood log supply.

While our softwood harvest has reached 17 million cubic metres the average volume over the last 10 years has been marginally over 15 million cubic metres per annum.

In the last 3 years the harvest has exceeded availability. Without any new plantings of scale for the last 25 years, following the cessation of various State and Territory forest agencies in the early 1990’s production has gone from significant surplus in the late 1990’s to significant shortages.

Sawmills and Panel mills are nearly all looking for more supply and the long term outlook for the Australian economy is continued growth.  The short term may see contracting demand as the housing market tightens but this will eventually turn upwards as the economy rebounds and our population continues to grow.

There are a number of options to increase log supply:

  • Developing new plantations has a 25 to 30 year waiting time for additional sawlog supply although pulpwood could be produced in 10 to 15 years.
  • Improve plantation productivity. This can be done with fertilizing but late age fertilising is expensive and it can effect wood quality.
  • Demand the cessation of log exports and these exports are often low-quality logs from thinnings from regions where there are no markets for them. Cessation will impact the ability of these regions to produce the sawlogs industries want by limiting thinnings.
  • Investigate the supply chain to ensure the right log products are going to the right processors and this may require a re-think of log specifications and harvest and haulage systems
  • Review the softwood value stream to assess where value is created and costs mapped.
  • Investigate the waste stream for recoverable wood from not only house demolitions but also harvesting residues, processing offcuts and builders waste. This option could provide some additional volumes for some processors but needs testing to assess its real potential in terms of realistic supply and its cost efficiency.
  • Review building and timber utilisation standards to achieve greater consistency within the states and increase the efficiency of wood products in construction and fittings.

The Australian Forest Products Association is calling for an additional 400,000 hectares of plantations in Australia and urging the government to assist with this target.  This could be a long wait given neither the Commonwealth or State Governments have any cleared land they can immediately establish to new plantations and apart from funding announcements in Victoria and New South Wales, generally government funding offers have been meagre to non existant.  Other models will be needed and soon?

For potential answers and insights contact Margules Groome’s Wood Products team.