by Chris Tobin
The impact of coronavirus is biting into South Canterbury’s economy, with major industries saying the situation is challenging.
Wood harvesting has dropped dramatically due to coronavirus and the whole industry around the country was in lockdown, Laurie Forestry woodflow manager Rodney Ryder said.
Mr Ryder organised log shipments for the company, which has offices in Waimate and Christchurch, through PrimePort Timaru and Lyttelton.
“It’s not just forestry. It’s dairy, meat, education and it works both ways.
“If you look at all the products out of China, they’re not coming in as well and the container vessels coming in are part-loaded.”
He expected there would be shortages in a range of products in New Zealand.
Nine crews, each consisting of three or four people, worked for Laurie Forestry. Mr Ryder said they were being kept on at a “low throttle”.
“Timaru port operations for logs are working only three days a week; Timaru and Lyttelton are on reduced hours.”
He said there were still a few log ships being loaded, but not a lot.
“It’s a national problem. We’re in a holding pattern but one advantage we have with trees is if you don’t cut them down, they get bigger.”
The log export trade to China was worth $2.7billion annually.
In other parts of the country harvest crews were being laid off or working reduced hours.
Forest Owners Association president Peter Weir said many Chinese sawmills had yet to get back to work.
Things had been complicated further by logs sales in China requiring a letter of credit and since mid-February these had been unavailable in China.
Laurie Forestry managing director Allan Laurie said for those working at the “coalface” the impacts had been immediate and brutal.
A holding pattern operated for the dairy sector also but Fonterra chief executive Miles Hurrell said the company had contracted a high percentage of the 2020 financial year’s milk supply and this was helping it.
“The current situation is very fluid and uncertain.
“There has been a slowdown in processing of containers at ports and we are managing the flow of our product into China carefully to avoid congestion. Currently, our product is continuing to be cleared by Customs and quarantine officials.”
With movement restrictions in China he said many restaurants and food outlets were closed, which was having a major impact on food service clients.
“We will provide a further update on the impact of coronavirus on our business when we announce our interim result on March 18.”
General manager livestock and shareholder services at Alliance Group, which operated Smithfield near Timaru, Danny Hailes, said the situation remained challenging for Alliance and the wider red meat sector.
However, all Alliance plants remained operational and products were still being shipped to China.
“The outbreak is affecting the demand for our products and has led to global pricing volatility.
“Although there are some early signs of improvement in some parts of China, it is a fluid situation.
“We have been working with our partners to place more product in the retail and online purchasing segments.”
With pricing volatility, Mr Hailes said there was pressure on prices they paid farmers for their livestock.
“We are experiencing no issues with cold storage for our products.
“Whilst there are challenges in the short-term, the longer term outlook for red meat protein remains strong.”
Late last month Ngai Tahu Tourism chief executive Quinton Hall told The Courier it had more than 6000 customer cancellations and expected to be up to 90% down on the China market for February.
Ngai Tahu spokeswoman Katarina Johnson said there was nothing new to share.
Prime Minister Jacinda Ardern has announced the Government would give $11million to Tourism New Zealand to try to diversify the market, focusing on the United States, Britain and Australia with $1million of the amount dedicated to domestic tourism.
Meanwhile, this week Statistics NZ said the total value of exports to China in the four weeks to February 23 was about $1.1billion, about $93million less than for the same period in 2019.
Dairy export values to China were comparable to 2019 as higher prices had compensated for lower quantities.
Meat exports were worth about $170million in the last four weeks, down from about $280million in the same period last year. About $180million of forestry products exported were down from almost $250million in the same period last year.