Export log prices have climbed to their best level in 20 months, and for forest owners who took price cuts through 2025 that is genuinely welcome. The FICA November 2026 schedule has A grade 3.9m at $134/JAS, A grade 5.9m at $137/JAS and AO grade 5.9m at $140/JAS. That is real money at the wharf gate.
The harder question for anyone running a forestry business is whether this is a margin recovery or a window that closes in February. The evidence points to a window, though potentially a decent one.
The currency did the heavy lifting
Marcus Musson, chief operating officer at Stand Forestry, is not dressing it up. “Before we get too carried away and order a new Maserati, it’s important to understand that this increase is not due solely to a supply and demand imbalance and more thanks to reduced shipping costs and foreign exchange,” he writes.
The mechanics are simple. The Reserve Bank’s decision to hold the OCR knocked the NZ dollar lower, the yuan has strengthened to a four-year high against the US dollar, and Handysize freight rates have eased on softer global demand. Every one of those is outside the industry’s control, and every one can reverse.
That matters because shipping has been the sector’s biggest drag. In September, Laurie Forestry’s Allan Laurie identified freight as “the largest reason why forest owners are not enjoying a better return“. Cheaper freight is a gift, not a strategy.
Chinese ports are clearing, just not fast enough
The demand side is better than it was, but not transformed. Uplift from Chinese ports is running at about 65,000m3 a day and inventories have fallen 270,000m3 since September to 2.3 million m3. Back in September, Laurie was reporting offtake of 57,000-58,000m3 a day and inventory of 2.47 million m3, so the trend is moving the right way.
Musson’s threshold is blunt. “Until we get close to a 2.0 million m3 inventory level we are unlikely to see significant increases in CFR sales prices,” he says. In the same report he notes China’s manufacturing PMI slipped back into contraction at 49.3 in October, while producer prices rose 5.7% against consumer inflation of just 0.7%. Chinese manufacturers are paying more for inputs than they can pass on. That is not the backdrop for a sustained timber boom.
Who actually banks the gain
Higher wharf-gate prices flow first to forest owners. Further down the chain, the picture is murkier.
FICA reports the harvesting and log transport fleet burns more than 300 million litres of diesel a year, and the industry is now paying more than $400 million a year in additional fuel costs compared with October 2025. For contractors and hauliers working on fixed or slow-moving rates, that wipes out much of any upside before it arrives.
Traders are not flush either. Laurie Forestry’s October figures show they were still selling at roughly a US$4/m3 loss, with CFR costs of US$132 against an average selling price of US$128. That is better than the historical US$6-7 loss, but a supply chain where the middlemen lose money on every cubic metre is not a healthy one.
How the last year softened the sector up
This rally comes off a low base. Through 2026 prices moved sideways at best, falling 7% in June before recovering to around $125/JAS in North Island ports and $115/JAS in the South Island by August, as China posted its weakest quarterly growth in three years. Operators have spent most of two years cutting crews, deferring harvests and arguing with councils over rates. A $10-15 lift per JAS is breathing room, not a reset of the balance sheet.
February decides whether this lasts
The next test is Chinese New Year. NZ supply normally drops over Christmas, which could create a shortfall by mid-February just as China restocks. But the holiday itself strips about a month of demand out of the market. Musson reckons the outlook into the second quarter of 2027 looks rosy if China enters the break below 2.0 million m3, but warns that NZ’s summer harvest, encouraged by attractive prices, may scupper that.
In other words, the industry’s own response to good prices is the biggest threat to them. Owners who rush wood to the wharf this summer could flood the very window they are trying to exploit.
The more durable good news is at home. Musson points to building consents up 18% annually in September and 35% in Canterbury, which typically feeds through to structural timber demand over the following 12 months. Laurie has already called Canterbury sawmills “the brightest beacons of the lot”.
For forest owners, the sensible play is to sell into this price while it holds, lock in domestic supply relationships where possible, and not plan 2027 around a Chinese recovery that has not yet shown up in the data. The currency gave forestry a good month. It will take Chinese builders, or New Zealand ones, to give it a good year.
Sources
- NZ Herald: Forestry report: Has Christmas come early? – Marcus Musson (2026-11-13)
- interest.co.nz: Stand Forestry’s Marcus Musson says export log prices seem to be firming (2026-11-12)
- FICA: Market Update – November 2026 (2026-11-10)
- Laurie Forestry: Monthly Market Report – October 2026 (2026-10)
- Timberbiz: Opinion – Allan Laurie, stability is returning to the market (2026-09-11)
- NZ Herald: Forestry keeps weathering global market headwinds – Marcus Musson (2026-08-21)
Join the discussion
Add useful context, ask a good question, or challenge an idea — keep it specific and respectful.