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Given Australia’s burgeoning wood surplus, does it really need to log more native forest?

By Russell Warman - posted Thursday, 27 June 2013

Australia passed some significant landmarks in wood production last financial year. The latest quarterly figures by ABARES on wood product statistics showed that in 2011/12, for the first time, Australia produced a larger volume of hardwood logs from plantations than it did from native forests. Obscured in the figures was another significant landmark; Australia produced as much plantation log as the total volume of logs used to meet national wood product demand. Nineteen million cubic metres of logs were produced from Australia’s plantations; the same amount of logs used to make the wood products (including sawn wood, wood panels and paper) Australia consumed.

In addition to the plantation logs, 19 per cent (4.5 million cubic metres) of the nation’s log production came from native forests. This was the lowest level ever, and reflects ongoing trends towards plantation wood and declining native forest wood output. The transition of sourcing wood from natural forests to plantations is not just an Australian phenomenon, it is occurring across the globe. Nor is the process finished or levelling off – Australia’s plantation log supply is forecast to grow significantly based on the current estate.

At the same time two weeks ago that ABARES published these figures, Rob Hampton, the CEO of the Australian Forest Products Association, published an opinion piece entitled “What are we doing to ensure forestry doesn’t follow Ford?” Its main theme was that wood is a valuable material that has much to offer society and as such is an industry that requires thoughtful support from government. Unfortunately, the core ideas got side-tracked by old industry laments about protecting forests in reserves; it has cost the closure of mills across the country, contributed to holding the industry back, and adds to a negative balance of trade in wood products. It claimed that Australia once had an industry “the envy of the world”, with “abundant resources” and “access to markets”, but that in the last fifty years the industry has “shrunk to a quarter”.


In these laments the piece highlights an ongoing failing in some of the thinking regarding the wood products industry about the challenges the industry faces in Australia. Its real problems are not resource problems – they are largely manufacturing problems. Far from shrinking by three quarters, Australia’s log production has grown over the last fifty years by 130 per cent. Domestic demand has grown by just a third over the same time. Unlike fifty years ago, Australia now harvests more logs than it consumes. It has done so since 1995/96. And, as of the last few years, it has harvested more logs from plantations alone than its total wood product consumption requires.

Using the balance of trade figures for wood product to infer that Australia doesn’t have enough wood, and that reservation of native forests has contributed to this, is misleading. But, on a closer look at the balance of trade in wood products, it does point to the real challenge facing the wood products industry in Australia. According to ABARES’s Australian Commodity Statistics, Australia imported 6.5 million cubic metres of log equivalent in wood products in 2010/11, but exported 12.8 million cubic metres of log equivalent in wood products. This represents a trade surplus of more than 6 million cubic metres of logs worth of wood products. The problem is that these imports cost Australia $4.4 billion but the country only received $2.5 billion for its much larger volume of exports. The reason for this discrepancy is that Australia’s exports are dominated by lower value-added materials, for example net exports of 1.8 million cubic metres of whole logs and 4.1 million tons of wood chips in 2011/12, while its imports are dominated by higher value-added products, for example net imports of wood-based panels of 330,000 cubic metres and paper and paperboard of 625,000 tons. Australia’s negative balance of trade in wood product value, similar to the ‘decline’ in the industry, is not about a lack of wood – it is about where value is added to wood.

Logging more native forests, such as through cancelling reserves, as has recently been considered in Queensland and New South Wales, will only make a very small difference to the nation’s total wood supply. It will not address ever-declining jobs per unit of wood product brought about by ongoing technical advances in wood processing. Nor will it change the competitive pressure native forest wood faces from more efficiently produced and processed plantation wood. Nor will it address ongoing declines, nationally and internationally, in per capita wood consumption resulting from the cost saving drive by wood processors to more efficiently utilise what logs they do buy. Nor will it reduce the competitiveness of internationally processed wood imports. And not only does it avoid confronting these issues, it generates controversy and undermines the industry’s social license, acting as a drag on forward momentum.

If public discourse about the wood products industry continues to focus on old arguments over native forest resource access, there will continue to be a failure to address the real challenges the sector faces. This is unfortunate because, as Ross Hampton noted, wood products do have a lot to offer.

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About the Author

Russell Warman is currently undertaking a Masters in Environmental Studies at the University of Tasmania, looking at the global transition of wood production from natural forests to plantations. Previously he worked as a forestry policy adviser to the NGOs involved in Tasmania’s forest negotiations, as well as numerous prior jobs in natural resource management and environmental planning.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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