Logging halt undercuts strong export month

Log exports fell sharply in April 2020 after logging operations were suspended during alert level 4, but average prices per cubic metre picked up, Stats NZ said today.

In contrast, dairy and fruit exports were strong despite fears of port congestion amid the COVID-19 pandemic.

Total exports fell $220 million (4 percent) to $5.3 billion in April 2020 compared with the same month last year.

“Total exports would have been worth almost the same as April last year, if they had not been undercut by the big drop in logs,” international statistics manager Darren Allan said.

Exports of logs were worth just $96 million in April 2020, down $211 million from $307 million last April. While the quantity of logs exported fell 69 percent, the biggest-ever monthly percentage fall, the price has risen to $170 a cubic metre this month after falling to $137 in July 2019.

“Log harvesting was a non-essential service under alert level 4 and didn’t restart until alert level 3 at the end of April, so it is understandable that log exports have dropped sharply,” Mr Allan said.

Most New Zealand logs are exported to China.

“However, the increase in unit price may suggest there is still unmet demand as log inventories in China are run down and export values may bounce back quickly as harvesting picks up again.”

The value of sawn timber exports also fell $61 million or 79 percent, reflecting the log shortage.

Higher milk powder prices offset log delays

Dairy exports were strong in April 2020 – milk powder exports rose $202 million (29 percent) on April last year. The rise was entirely price driven with no increase in quantities.

Butter was the only major dairy product to fall this month – dropping $15 million to $126 million.

Japan hungry for New Zealand fruit while crude oil prices plummet

Gold kiwifruit exports continued to rise after a strong showing in March 2020. Gold kiwifruit increased $116 million (37 percent) in April 2020 when compared with April 2019. Exports to Japan led this increase, with gold kiwifruit exports to the country more than doubling compared with April last year.

“The value of apple exports increased $49 million as exporters managed to secure shipments, despite fears of clogged ports and worker shortages,” Mr. Allan said.

“This rise was led by exports to Japan, not typically a major market for our apples.”

Exports to Australia fell $161 million (24 percent), with crude oil being the biggest factor in the fall. Export prices of New Zealand crude oil began to fall significantly in March, coinciding with global crude prices crashing following the effects of the COVID-19 pandemic. New Zealand’s crude oil prices are now at their lowest level since February 2016.

See Effects of COVID-19 on trade: 1 February-13 May 2020 for an earlier release of provisional trade statistics.