FM Group Newsletter

Cancer Society Tranz Alpine Scooter Safari

We have a team of committed Forest Management employees and directors who are entering the Scooter Safari in 2022!

The hunt is now on for the cheapest, best looking and least reliable 50cc scooters that money can buy.

The Scooter Safari is a fundraising event where 250 motorized Scooters ride 250kms coast-to-coast over the Southern Alps from Christchurch to Hokitika to support the work of the Cancer Society in our communities.

It's an awareness-raising and fundraising event and includes survivors, their whanau and friends and those just wanting to support and make a difference. By raising funds for the Cancer Society you are helping us to continue our work to support people with any type of cancer across our region. Every day the Cancer Society deliver practical assistance to those going through some of the most challenging time in their lives. They do this by providing accommodation near hospitals, transport to treatment, counselling, education and so much more. The Scooter Safari will enable us to help and support more people with cancer and cancer prevention.

It's not a race or for the faint hearted - it is designed to be the coldest, longest, hardest, most gruelling and uncomfortable test of endurance on a city scooter. We are doing this to show our support and awareness for those living with cancer and the challenges they face - the Safari is nothing compared to that!

Started in 2009, the Scooter Safari was created by Jayne and Mike Rattray, born in support of a friend diagnosed with bowel cancer.

https://www.scootersafari.co.nz/

We will keep you updated as the team prepares their rides for this adventure!

ETS Cutover & Carbon Stock Update

Emissions Trading Scheme - Second Rotation forest registrations

Forest owners who want to achieve the maximum income from their forest need to register in the Emissions Trading Scheme (ETS) before the end of 2022.

Averaging accounting is a new method to account for carbon storage in forests registered in the New Zealand Emissions Trading Scheme (ETS). From 2023 all newly registered post-1989 forests must use averaging accounting unless they are registered as a permanent forest.

Averaging will have minimal benefits for 2nd rotation or older forests. These forest owners should register their forest under the current ‘stock change account’ methodology as soon as possible.

Applications to register land in the ETS must be approved by Te Uru Rākau – New Zealand Forest Service by 31 December 2022 if you want to:

• claim New Zealand Units for the 2018–2022 mandatory emissions return period

• have the option of using stock change accounting.

Averaging accounting will automatically apply to forests registered from 1 January 2023.

New applications to register land can take around 6 months to process and are processed in the order they are received, so should be submitted as soon as possible.

The expense of registering and participating in the scheme is low when compared to the potential opportunities and returns further down the track.

Cutover post-1989 forest can now be registered in the ETS

Land that has recently been harvested and is yet to be replanted – cutover land – can be registered in the ETS.

This applies to forest land that has been harvested (cleared) and will be re-planted with forest species, at the appropriate density, within four years of clearing.

If you apply to register cutover land, you should provide additional information to support your application so we can be satisfied that the land will be re-established in time. At a minimum, this should include:

• the most recent possible imagery showing forest species on the land prior to clearance

• the earliest possible imagery showing the clearance

• a notification of when you will replant the area (for example, June 2023) and supporting documents, such as your contract with a planting crew.

We have specialised drone equipment capable of capturing the required imagery to show the post-harvest state.

If you have cutover land awaiting replanting, please contact us to discuss registering this into the ETS before the end of the 2022 deadline.

Please note: It is important that registrations are submitted with sufficient time to be processed by MPI before the 31 December 2022 deadline.

Forest Management Group offers specialist services in the ETS and can undertake work in a variety of areas including:

• Registering post-1990 forests into the ETS

• Managing carbon flows to understand repayment obligations

• Planning and managing new planting projects

• Establishment of joint ventures

• Preparing One Billion Trees Fund (1BT) applications

• Sale of carbon credits

Log Export Market Update

The previous 3 months has been challenging for the export log sector with the price of A grade logs dipping well below the $100 per/ jas mark across the majority of NZ ports. The main contributing factor has been record shipping rates and delay costs. Contributing factors are China’s COVID elimination strategy, which to date has seen major cities and ports locked down when minor outbreaks occur.

The month of January has seen inventory across Chinese ports sitting around 5.0m m3 with daily uplift being relatively stable at 80,000m3 per day. As the Chinese New Year approaches inventory is expected to climb as sawmilling and construction ceases for 2-3 weeks. An extended break in log supply from NZ over the Christmas break, due to pricing, will aid in keeping these inventory levels in check.

Factors effecting log supply into Asia is the Russian log export ban which came into effect from 1 January, volumes coming from the US have also reduced because of strong domestic demand and tightened phytosanitary rules for importing SYP, and less volume is expected from Europe because of strong domestic lumber prices and lesser areas of forest affected recently by bark beetles.

Freight rates for February have now come off the highs seen in Nov/Dec and are looking relatively stable in the near term. Growing volumes of minor bulk trade, Australian grain in particular, combined with an historically depleted orderbook are supporting high fleet utilisation and firm freight rates. Bunker fuel prices have increased steadily through January from US$640/mt to +/-US$690/mt.

The NZD/USD exchange rate has now slipped below 0.70c off the back of high inflation, renewed concerns about the impact of COVID-19 on the NZ economy, and expectations of rising interest rates in the US. A decrease in exchange rate will aid in improving export log prices over the Feb/ March period.

The China economy in general has uncertainty surrounding COVID-19 related restrictions on supply chains and economic activity which are an ongoing threat. The positives for NZ is the softwood log supply reducing from many sources creating and upward movement on NZ log prices over the next 2-3 month period.

With pricing now picking up to good levels again and optimism in the air around further increases it’s worthwhile contacting your regional manager to get an update on current log values.

New Faces at TFM in Marlborough

Tasman Forest Management (TFM) Marlborough have some fresh new faces in the team. After 21 years Tamati Smith decided it was time for a change of lifestyle and in November, Leah and him shifted up to Whangamata in the Coromandel. Tamati was a founding partner in TFM and was an influential part of the make up of the Marlborough Forestry industry.

Warwick Winn is coming on board as the new Marlborough Regional Manager and a partner in TFM in February. Warwick is a very experienced Forestry Engineer who is well respected within the region. Warwick will bring a lot of enthusiasm and fresh ideas to the team. Warwick has worked for Hancocks, Taylors Contracting and most recently for Nigel Bryant Logging and has a great mix of practical and technical knowledge.

Gary Connolly transferred from working for Forest Management (NI), based in Napier, down to Marlborough in October last year. Gary has over 45 years’ experience in our industry and there’s not many challenges he hasn’t come across and found a solution to before. Gary will also be a partner in TFM.

To assist with covering some of the accounts work Tamati was involved in, Marit Campbell commenced work for TFM out of the Blenheim office in January assisting Karen MacKenzie with the office administration. Marit has a strong background in accounting.

Jeremy Patterson Green is now working on contract for TFM a couple of days a week doing resource consents and harvesting planning work.

Craig McMiken is overseeing the Nelson and Marlborough teams. There is currently a really good mix of harvesting, forest management and continued opportunities with the ETS. To find out more feel free to contact us.