China’s indefinite suspension of timber exported out of Victoria could boost the Green Triangle’s processing industry, according to one forestry sector representative.
- China indefinitely suspended imports of timber logs from Victoria this week
- The local timber processing industry says it could be an opportunity for growth
- State and federal governments are working to find solutions for the industry
The Green Triangle forestry sector, home to one of Australia’s largest timber processing hubs and commercial forestry estates, is reeling from the suspension of export logs from Victorian ports.
Industry sources estimate the Green Triangle timber export industry underpins around 1,000 jobs in the south-east of South Australia and western Victoria.
SA Timber Processors Association chief executive David Quill said the situation could bring opportunities for smaller, local operators.
“One of the major issues facing local processors, whether they be large or small, is the fact that this fibre is being exported, so if the exports were to cease there’s a huge opportunity for growth in this region,” he said.
However, he said he did not believe local processors could take on all the extra resources.
“China is without question the biggest export market,” Mr Quill said.
“I think there’s going to be huge pressure on domestic processors to take additional fibre if the demand to China is stopped.
“I think the demand could be met probably to a maximum of 200,000 tonnes, so it’d still be a shortfall of 800,000 plus [tonnes per year].”
Mr Quill said the export market from the Green Triangle was one reason there had not been enough wood available for local processors to grow their operations.
“The ownership of plantation softwood plantations in this region has changed from domestic ownership primarily to overseas fund managers and … are driven by profit,” he said.
“So what’s happened is that the volume of wood export has increased, mainly because the demand from China has increased, and therefore the price they’re prepared to pay for that wood has increased.”
Mr Quill did not think the larger domestic timber processors would be affected by the situation in the short-term.
“If we want to come out of COVID, employ more people, and get this country back on its feet again, we should be increasing our manufacturing industry.
“This represents a golden opportunity to do so.”
Suspension could have ‘significant impact’
Brad Coates from the Construction Forestry Maritime Mining and Energy Union said if the suspension continued past Christmas, there would be significant industry impacts.
“At this stage, it will affect jobs in the harvesting and haulage sector which have already been affected by the downturn in hardwood wood chips,” he said.
“If they can resolve some of those issues and start up the exports within two or three weeks it won’t have a major effect on the industry.
However, Mr Coates acknowledged the impact of the timber export industry.
“[But] there is an opportunity to increase our value-adding processes and manufacturing here in Australia so we are not so reliant on exports.”
The SA Minister for Primary Industries and Regions, David Basham, said he was working with the Green Triangle industry and his federal counterparts to find solutions.
“The issues are just the inability to export out of Portland, which then causes backlog issues right through the process,” he said.
“We have to try and get that resolved as quickly as possible to allow the industry to operate in the most efficient way.
“We’ll also make sure that where channels are still open and operating [that] protocols are there to make sure timber leaving there is up to standard.
“The Department of Agriculture, Water and the Environment is the federal body responsible.”
The minister said he understood the suspension covered all wood being exported out of Victoria, including South Australian-grown timber.
He said conversations with the timber industry were needed to determine whether exporting from other ports was “feasible”.
“It’s not something you can just turn on and off overnight, to implement that sort of approach, to have a complete redirection,” he said.
However, Mr Quill said alternative ports would likely be unviable options.
“Currently, the total volume of softwood material being exported out of Portland is slightly in excess of a million tonnes a year,” he said.
“Port Adelaide — you’d be adding a cost of about $30 to every tonne of wood.
“Exported through Geelong, you’d be adding a cost of something in the order of $25-$28 a tonne, which would make [both of them] cost-prohibitive.”