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.

It has been predicted for many years and the reality has finally arrived, 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 softwood plantation development by the 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 now.

Nearly all sawmills and panel mills are looking for more supply and with the long-term outlook for the Australian economy being continued growth. The short term may see contracting demand as the housing market tightens but this will eventually turn upwards again as the economy rebounds and our population continues to grow.

There are a number of potential options to increase log supply:

  • Developing new greenfields plantations. But this option has a 25 to 30 year waiting time for additional sawlog supply, although more pulplogs could be produced in 10 to 15 years.
  • Improving plantation productivity. This can be done with late-age fertilizing but it is expensive and can affect wood quality.
  • Demand the cessation of log exports. A counterproductive option as these exports are often low-quality logs from thinnings from regions where there are no domestic markets for them. Cessation will impact the ability of these regions to produce the sawlogs domestic industries want by limiting thinnings.
  • Investigate the supply chain to ensure the right log products are going to the right processors. 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.
  • Investigate the waste stream for recoverable wood. This may include house demolitions, 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 use efficiency of wood products in construction.

The Australian Forest Products Association (AFPA) is calling for an additional 400,000 hectares of plantations in Australia and urging the government to assist with this target. This could be long wait given neither the Commonwealth or State Governments have 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 to kick start plantation development will be needed and soon.

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