China opens the door to B.C. logs

Posted by Rumin Mann
July 13th, 2010

Access to more Chinese ports is expected to spark new logging activity in the province’s hard-hit northwest sector

The Chinese and Canadian governments have reached a trade agreement that opens new doors into China’s growing wood products market for B.C. logs.

As of July 1, B.C. logs can be shipped year-round into China through two ports, Putian in the province of Fujian and Taicang near Shanghai, without being treated for pests, forest industry consultant Brian Zak said Thursday.

Access to more ports on a yearround basis is expected to boost log exports to China, particularly from B.C.’s northwest forests, he said.

Zak is the forestry sector representative for pest control issues in the log and lumber trade. He said the Canadian Food Inspection Agency notified him of the changes last week.

Until now, China would only accept untreated B.C. logs during the winter months and they all had to go through Putian, where they are fumigated in massive tarp-covered bunkers.

China has become the world’s largest importer of logs, consuming 28 billion cubic metres of them in 2009; so far this year, imports are up 13 per cent. B.C. exports account for only a tiny fraction of that amount, 387,000 cubic metres, all low-grade wood for which there is virtually no market in North America. The opening up of the Chinese market is expected to spark new logging activity in the province’s economically hard-hit northwest coast, where much of the forest consists of lower-grade hemlock.

“The new agreement to open Taicang Port is good for all companies selling into China,” said Wayne Drury, president of Coast Tsimshian Resources, the largest logging company in the Prince Rupert-Terrace corridor.

“We have very few opportunities to sell into a local market. There are no sawmills operating in the northwest and the pulp mill closed for good,” he said in an e-mail.

Log exports are politically sensitive in B.C. — opponents accuse the government of exporting sawmilling jobs by permitting logs to leave the country. The agreement was only announced within a small circle of industry players.

Zak said the lifting of trade barriers brings Canadian export regulations in line with those already in place for Russian and Alaskan logs.

“Our shipments were seasonal, from Oct. 1 to April 30, whereas Alaskan and Russian logs were allowed yearround shipments,” Zak said in an interview.

“The reason that we were seasonal is that they did not have a familiarity or a comfort factor with the Canadian logs or any pests that might be associated with them at that point in time. We were basically on probation with our logs.”

Zak said an expanded trade in low-grade logs is expected to created new jobs in logging, trucking and long-shoring in this province. There are few mills on the coast capable of handling the logs so jobs are not being lost in milling, he said.

“Moving hemlock is one of the toughest challenges that they have on the coast. Appearance-grade hemlock from the high-valued logs, we can sell anytime. The difficulty we have is with the small, low-grade logs. The difficulty is that there are so many low-grade logs in the stands. And at a time like this, when markets are poor, loggers hesitate going into any stand unless they can sell the whole profile [all the grades of logs].”

Only coastal timber species are covered under the agreement. Before July 1, logs could only be exported yearround if they had been fumigated here, kept under water for 90 days, or debarked, costly procedures that made the logs uncompetitive with Russian and Alaskan logs.

Zak said Chinese sawmillers are discovering the advantages of B.C. hemlock over both Russian red pine and New Zealand radiata pine. It is stronger and it absorbs stains and preservatives better.

As the Chinese become more familiar with the attributes of B.C. species, Zak expects trade to increase.

“They like our hemlock because it has so many good features to it. They also have the ability, because of their cost of labour, to extract a lot of the material from low-grade logs that we don’t have the opportunity to do over here.”

China’s appetite for logs is growing at a time when its principal supplier, Russia, is cutting back on exports. Russia shipped 14.8 million cubic metres of logs into China in 2009, down from 18.6 million the year before. A cubic metre is about the same volume as a telephone pole.

Source: Vancouver Sun – July 9, 2010

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