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A question about log exports

Wink Sutton's Blog
Tuesday, August 30, 2011

During the business section of the 2011 AGM in Masterton earlier this year Allan Laurie asked a very relevant question. Allan’s question was along the lines ‘what are we doing to educate the Chinese and Indians about the properties of our radiata pine’. In my opinion Allan’s question was not adequately answered.

About two decades ago the New Zealand forest industry produced a series of brochures in Chinese and other Asian languages giving details on the properties of radiata pine logs as well as how the wood might be used. Is the log export trade still attempting to inform the Chinese about radiata’s properties? Are we doing likewise in India?

On a recent visit to China I was walking along the back streets in the city of Dali in southern China. By chance I came across a one-man joinery workshop in an area no bigger than a single garage here. The joiner was making wooden panel doors. The doors contained a mixture of wood species but the long door sides or stiles as well as the rails were obviously radiata pine. The even textured wood with wide annual rings, obvious resin canals, wide pith and of course sap stain. The wood was most probably sawn from radiata logs imported from New Zealand.

Communications were impossible as I did not speak Chinese and the joiner did not understand English but I very much doubt if he had any knowledge of the different woods he was using. I also doubt he would have any concern about the longevity of the doors he was making.

Termites and borer are present in both China and India and presumably both are a serious problem in the long term. Is there any attempt to have our radiata pine treated? I do not know if it is even possible. I do know it is very very hard to get wood purchasers to take a long-term view. Most are interested in a making a sale today.

What I fear is that we could be setting ourselves up for the international equivalent of our leaky building crisis. There could be very serious long-term problems for our forestry export trade. Our competitors will make the most of radiata’s failure to withstand a borer attack.

Do not be fooled into thinking that in 30 year’s time no one will be able to tell what wood species was used to make the borer-ridden or termite-ridden door. Imported radiata is so distinctive that any one with any wood knowledge could easily be able to identify where the wood came from.

But New Zealand has been exporting logs to Japan for nearly 55 years and yet no problems have emerged? As I understand, the market in Japan it is very different from that in China and India. Although there is a tradition of wood being used in Japanese house construction these houses are not permanent. Young couples prefer to build a new house than take over and renovate their parent’s house.

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Who earns the first dollar?

Wink Sutton's Blog
Monday, May 30, 2011

In the early 1990s I attended a talk that changed how I look at the economy. The central theme of the address was the question − who earns the first dollar? Capital gains may create wealth for the individual but do nothing for a national economy.

Seven figure bonuses may be paid to successful manipulators of the global financial systems. As the bonuses are real, it gives the impression that massive wealth has been magically created. But has it?

We have the impression, especially from their earnings, that doctors, accountants, lawyers, and especially market bankers, actually create wealth. They may be well paid but only rarely do they actually create wealth. It is surprising that there appears very little evaluation of who or what actually creates wealth in an economy.

In the present global economic downturn there is much discussion of the future New Zealand economy. There is promotion of us becoming a service or tourist economy but that overlooks the fact that these industries do not create wealth. We would become more dependent on others creating wealth in the first place. Do we have any comparative advantages relative to other economies? A common feature of service economies is that they are generally dependent on relatively low wages. Do we really want that? Is such an economy sustainable in the long term?

Who, or what initially creates wealth? They are mostly industries –

  • Extractive, especially mining
  • Growing such as agriculture, forestry and horticulture
  • Manufacturing, creating goods.
  • Our future may be more sustainable and profitable if we based our economy on what are our comparative advantages −
    • A relatively low population
    • Abundant sunshine and a high average rainfall
    • Young and generally fertile soils.

We are very good at growing produce such as food and wood but appear to be not so good at marketing, and especially profitable processing. Rather than promoting
a service and tourist economy we may have a more sustainable and a more profitable future if we concentrate on better marketing and profitable processing of our primary production.

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Disclaimer: Personal views expressed in this blog are those of the writers and do not necessarily represent those of the NZ Farm Forestry Association.

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