Forestry - Quarterly log prices by grade and market 1994–2015

Ministry for Primary Industries

Definitions

Log grades:
Export log grades are typically measured in Japanese Agricultural Standard (JAS) cubic metres. JAS measures logs according to prescribed formulas. Domestic logs are typically measured in cubic metres or tonnes. Conversion factors between all 3 measurements vary owing to a number of variables including wood age, log size, and taper, but are mostly within 90% of a 1:1 relationship. Conversion factors are assumed to be 1:1 by MPI.
A number of log grades have been selected to represent the overall log market. For the export market these are pruned (to Japan and Korea), A (Japan), J (Japan), K (Korea), and pulp grades. For the domestic market these are pruned (P1, P2), unpruned (S1, S2, L1 and L2, S3 and L3), pulp (as defined by Scion Research), and run-of-bush (a mixture of grades, generally unpruned).
More indicative information about the log grade specifications are available here http://maxa.maf.govt.nz/forestry/statistics/logprices/specification.htm

Log prices:
Log prices can be quoted at a number of different pricing points, like 'cost insurance freight' (or CIF, ie, landed at an importing port), 'free on board' (or FOB, ie, loaded onto a ship at an export port), wharf gate, on truck, and at stump. Export margins charged by New Zealand's log buyers can range from 4% to 15% of a landed price at wharf.

Data calculation/treatment

Where possible, the quarterly figures encompass a range of log prices for each grade, rather than a single figure. This reflects the range of prices associated with each grade and helps preserve the anonymity of individual company data. MPI uses a mid-range price to analyse these data. While a volume-weighted average price based on each company's production would give a better measurement of actual prices, volume data are not readily available.
MPI's quarterly log prices now feature the 12-quarter median price series. These prices are derived using the median prices of each log grade, averaged over the last 12 quarters. This price series tends to buffer the effects of any extreme spikes of troughs, which can occur from time to time and tend to distort trends in the short term.

Limitations of the data

Log prices can vary depending on exchange rates, log measurement methods, and log grade specifications. Log grades have also changed over time. Some industry commentators say log size has decreased within grades (both in small end diameter and length) but log quality is perceived to be increasing (particularly clearwood depth in pruned logs). Keep these factors in mind when comparing these log prices. Prices should be based on a common pricing point.

Log grade specifications can vary significantly between suppliers, even within a particular grade. For example, K-grade log specifications may vary in length, small end diameter and allowable knot size. This is even truer of domestic grades, where the Scion Research log grades used by MPI have not been universally adopted by the industry.
To help overcome the situation, MPI relies on industry sources to provide log prices to the nearest log grade equivalent and to identify any significant changes to log specifications.
Prices in the Japanese market are generally set quarterly, Korean prices are commonly set shipment by shipment, and other export markets vary. There is no standard time frame for reviewing domestic prices, which tend to fluctuate depending on sale agreements. MPI only records average log prices from its industry contacts on a quarterly basis.
Export prices are usually provided by industry sources in United States dollars, which MPI converts to New Zealand dollars using a quarterly exchange rate. MPI uses FOB as the pricing point for export prices, while the domestic pricing point is 'landed' or 'delivered' at mill. This means MPI has to make some assumptions about costs if the log prices provided by the industry are to another pricing point. All data are destroyed once they have been aggregated and averaged, to retain confidentiality.

Data provided by

Ministry for Primary Industries

Dataset name

Indicative New Zealand Radiata Pine Log Prices (Quarterly) 1994–2015

Webpage:

https://www.mpi.govt.nz/news-and-resources/statistics-and-forecasting/forestry/

How to find the data

At URL provided, download 'Log price series' from under the 'Indicative New Zealand radiata pine log prices' heading. Note that this dataset was formatted and collated for Figure.NZ by MPI, so the data in our downloadable file may not be in the same format as that on the website.

Import & extraction details

File as imported: Indicative New Zealand Radiata Pine Log Prices (Quarterly) 1994–2015

From the dataset Indicative New Zealand Radiata Pine Log Prices (Quarterly) 1994–2015, this data was extracted:

  • Rows: 2-4,251
  • Column: 3
  • Provided: 4,250 data points

About this dataset

MPI's log price information is available from a number of sources. Radiata pine log prices are published quarterly on MPI's website. These data are also available on Scion Research's Woodwide database. A and J grade prices are available free from MPI and the Overseas Trade Price Index is available through MPI's Statistical Releases by quarterly subscription.

Purpose of collection

MPI collects log prices to analyse trends rather than for marketing purposes, so it does not collect spot prices, day-to-day prices, or one-off sale prices. All data published are historical, usually on a monthly or quarterly basis.

Method of collection/Data provider

How the survey is compiled: These log prices are historical and indicative only and may not correspond to actual prices paid, or grades used, in market transactions. A 'best fit' is applied by survey respondents to align company log grade specification with the generic specifications. Direct comparisons with actual market prices may not apply due to differences between the specifications sets. The prices are subject to change when further data become available. The sources for this information are MPI's industry contacts.

MPI uses 3 sources for radiata pine log prices:
- surveys of a selection of major New Zealand log suppliers for indicative domestic and export log prices. These are published quarterly on MPI's website.
- the Japan lumber report for A and J grade export prices
- an Overseas Trade Price Index for Exports of Logs, Poles and Sawn Timber based on exporter declarations, published quarterly on MPI's website.