Log export markets play an important role in sustaining BC’s forest economy. Log exports are, and always have been, an integral part of a complex mix of factors that make up the coastal forest industry. Here at the PFLA blog, we post about log export policy because it’s an issue that directly affects our membership.
Because part of our mission is to encourage informed discussion on important policy matters, from time to time, we draw your attention toward articles we think you’ll find interesting—articles that add depth and analysis to the discussion or do a particularly balanced job portraying the nuance and complexity of log export policy.
Recently, we’ve come across three articles that match this description. The first two are from the January/February 2014 issue of “BC Forest Professional”— a bi-monthly publication produced by the Association of B.C. Forest Professionals — and the third is printed in the December/January 2014 issue of “Take 5″— a monthly news magazine published for mid-Vancouver Island communities.
For your interest, we’ve included a short excerpt from each article below with a link to the complete text documents.
Log Exports: Perspectives from a Generalist (pg. 12)
by Rick Monchak, RPF
… “There are two basic, important points about log exports that I find most folks are not aware of. First, most logs that are exported, including those from private land, must first be offered to the domestic market; they need to pass a surplus test. In other words, no BC mill wants to purchase these logs. No other province has this test; only in BC do we put up this hurdle. And it’s important to note the offered price is the domestic price, not the export price. This brings us to the second point — there can be a 100% or more difference between these two prices. And usually, the cost of supplying logs to the market is somewhere in between these prices. For the most part, companies lose money selling to the domestic market and make money selling to the export market.” …read more…>>
Export Report: An Overview of Coastal BC Log Exports (pg. 10)
by Dan Higgins, RPF
… “The ability to export logs at a premium allows the forest industry to log more of the timber profile profitably. Prior to the opening of the Chinese log market, second growth hemlock was undesirable as a species to harvest due to its low market value, so hemlock was generally avoided in favour of higher-value red cedar and Douglas-fir stands. Today, export China prices are on equal footing with China grade Douglas-fir, opening up more harvest opportunities and restoring the species balance of the coastal timber supply.” … read more…>>
Log Exports BC
by Rick Koslolofski
… “If a forest company or land owner wishes to export timber from provincial land of any kind, be it private land or a provincial forest tenure, the timber must be harvested and contained in a parcel, then the information on the parcel is submitted to an electronic system managed by the Ministry of Forests where the parcel is advertised as surplus for domestic production. If a domestic sawmill wishes to purchase this timber, they have first rights to do so, at fair market value, based on the past three months average domestic selling prices (not the higher export selling price). If, after a two-week advertising period, no domestic mills offer to purchase the timber the owner can sell the logs to an exporter. The owner pays the province a “fee in lieu of domestic manufacture” of approximately seven dollars per cubic meter (roughly $210,000 for one full freighter of logs).” …read more…>>