Australia's forest products sector welcomes today's ABARES Wood Volumes Analysis release, which highlights that improved government policy settings are needed to ensure our sector can be a sustainable manufacturing force, strong regional employer and a key economic driver for the country into the future, Chief Executive Officer of the Australian Forest Products Association (AFPA), Diana Hallam said today.
"Our sector is under enormous pressure following native forestry closures in Victoria and WA while we're also dealing with a two speed supply issue, where short-term we have a surplus of timber following the construction market slowdown and longer-term we can see supply shortfalls because we don't have enough trees in the ground," Diana Hallam said.
"While the ABARES forecast in growth of timber to 2050 is welcome, this is largely due to the regrowth of plantations and native forestry impacted by fires. It takes at least 25 years to grow structural timber for housing and the future beyond then is more uncertain. That's why we need to grow the plantation estate and retain access to sustainable native harvesting to ensure we can meet consumer needs into the future.
"We disagree with ABARES that Australia can rely on imports to fill a quarter of our domestic market for housing following permanent market disruptions caused by the COVID pandemic and war in Ukraine. Illegal and unsustainable logging in developing countries and now US tariffs are impacting heavily on the international market and are likely to continue to do so for some time.
"We welcome ABARES recognition that Australia's reliance on imports was a key driver on price increases during the COVID pandemic." Australia's average import unit cost for structural softwood sawnwood increased to a peak of $911/m3 (in real $2023-24) in November 2021, a 58 per cent increase from March 2021.
This price increase didn't include massive freight or insurance costs increases. For example, "the Freightos Baltic Container Index, a trend indicator of the global shipping market, increased by 646% over the period December 2019 to September 2021"[1].
AFPA also welcomes the recognition that the loss of local native timber harvesting will result in a "wide range of possible substitute products, from completely different non-renewable carbon intensive materials such as tiles, carpets and vinyl, or imports of wood products from a range of countries with differing environmental standards"[2] and recognition that native forest appearance grade products cannot be replaced by plantations and that "almost a third of hardwood sawmill products are used in high value appearance grade products. Appearance grade hardwood sawmill products make up 38% of all domestically milled appearance grade products, but account for 55% of the value."[3]
"The ABARES Wood Volumes Analysis also again indicates the housing market as the key driver of demand and this demonstrates the key need to drive sovereign capability in timber and wood-fibre supply," Diana Hallam said. "We welcome this analysis from ABARES and it shows that Australia's forest products sector needs the right policy and funding settings. That's what we're aiming to achieve through our Platform Australian Timber. Australia's Future., that we'll be working to get all sides of politics to sign up to ahead of the Federal Election," Diana Hallam concluded.
[1] Australian wood volumes analysis p57
[2] Australian wood volumes analysis p10
[3] Australian wood volumes analysis p29
