National call for briefings so exporters understand coronavirus trade effects

By RNZ

The National Party trade spokesperson Todd McClay is worried the government is not doing enough to avoid an information vacuum about novel coronavirus' effect on trade and business.

McClay said there was a lot of concern, particularly within the tourism and education sectors.

Given the jobs and reliance on the Chinese market, officials should be doing everything they can to prise information, he said.

"Not all answers will be there, but certainly the government needs to engage more and provide a lot more open information to the export community so they can start to have a bit more certainty and can start planning," he said.

New Zealand log exporters are bracing themselves for supply chain problems due to the outbreak and tourist operators are experiencing a drop in chinese visitor numbers due to travel restrictions.

The Forest Owners Association said some companies were already reducing their harvesting rate and that would reduce employment.

Forest Owners Association president Peter Weir said problems stemmed from the virus spread in China, extensions to the lunar new year holiday there, and competition from increased softwood supply from Europe.

Weir said it was not clear how long harvesting will be paused.

It was too early to predict whether lower exports may help the Chinese market recover, he said.

Pine trees are harvested on a hillside in southern Hawke's BayForest owners have stopped harvesting due to the situation in China, the Forest Owners Association president says.
Pine trees are harvested on a hillside in southern Hawke's BayForest owners have stopped harvesting due to the situation in China, the Forest Owners Association president says. Photo credit: RNZ / Kate Newton

"The situation is very fluid, has the potential to become very serious, but it is not armageddon - our resource is not on fire like on Australia. Forest owners large and small who supply the export market have either cut back or are considering cutting back on harvesting so that means we have to ask our contractors to shut down."

Many forest owners had shut down harvesting on Monday and the halt could last three weeks or three months, Weir said.

"We're monitoring log inventories in China. We know there's five to six million tonnes of logs in storage on ports in China, there's over a million tonnes per month arriving from New Zealand, there's effectively three to four months worth of normal consumption of log sitting on ports in China and the uptake is zero because it's Chinese New Year...

"The virus is not in the cities that are the wood processing hubs ... but if the contagion spreads then we have a big problem."

He said if logs sat in ports in China they would begin to degrade.

Additionally, when inventory was that high in China, the price paid for logs fell.

"The price is already at the point where it's break even at best in our highest cost regions, the Gisborne region ... so it's not surprise that the shut down has happened in Gisborne before anywhere else."

Weir said the number of jobs at risk were in the high hundreds to a thousand or possibly more.

The loss of work was "really tough", he said.

The Minister for Trade, David Parker, said the government had to be transparent in the information it had and to gather it from the industry and pass it on to others.

"There's already a lot of commentary out there that it's going to have an effect on the world economy and ... we're more exposed than some other countries because of China being our largest trading partner although the scale of that is not yet clear."

RNZ

Contact Newshub with your story tips:
news@newshub.co.nz