But disrupted shipping schedules are creating a fresh set of challenges for exporters.
Forestry contractors want the Government to help as forest owners stop harvesting because the twin impacts of the Chinese government-ordered extension to the New Year holiday to contain the spread of the virus and an oversupply of logs.
Forestry Industry Contractor’s Association chief executive Prue Younger said a survey of members reveals a third of loggers have shut down their business, a third are working short weeks and a third are working normally.
“I’d estimate more than 1000 people are out of work,” she says.
The survey has been repeated in the trucking industry and a reading of the initial 100 replies is looking equally as bleak.
“I’d say they’re doing it as tough as we are.”
Forest Owners Association chairman Peter Weir says coronavirus has exacerbated an already difficult Chinese market saturated with European logs he fears could take three to six months to recover.
China takes 80% of NZ logs and Weir says large forest owners who have chartered ships are still logging to fill the vessels while the domestic market is holding up.
But he warns that could change.
“All the ports in China are full so there is not much optimism in the short to medium term.”
Younger is seeking Government help for contractors to manage their financial obligations and shorter stand-down periods for laid-off workers to get the dole.
The industry fears the impact on the industry from the loss of highly skilled staff when it recovers.
“It’s not just going to last a month,” she says.
Hardest hit are contractors in Otago, Southland, East Coast and Northland.
Contractors president Ross Davies says the industry has responded to heightened health and safety demands by investing in expensive and complex machinery but that means contractors have high debt which has to be serviced.
Silver Fern Farms chief executive Simon Limmer says port congestion and supply chains in China are starting to clear but shipping companies are not confident their ships will be unloaded.
“This is causing shipments to fall out of schedule, shipping lines to drop containers at other Asian ports and in some cases to cancel sailings to China.
“This is pushing the bottleneck back onto NZ ports and exporters.”
Chinese are shopping again but are cooking at home and Limmer says the restaurant and food service sectors will take a while to recover.
Stock volumes handled at SFF’s North Island beef and lamb plants are ahead of the corresponding time last year and staff have been working overtime since early December while SFF ramped up to higher kill levels four weeks earlier than usual because of dry weather.
AgriHQ analyst Nicola Dennis says port congestion in China’s north, which predominantly handles sheep meat, is less severe than further south and lamb is being distributed relatively easily.
“Orders from customers in the hotel and restaurant trade are still scarce because of a slowdown in the Chinese food service industry.”
A spokesman for Forestry Minister Shane Jones says a series of options for assistance to industries was presented to a Cabinet committee last week.
They will be part of a broader discussion about how the Government aids key parts of the economy and will recognise the impact could be felt through other sectors.
The Forestry Ministry is speaking daily to forestry sector leaders and organisations about the impact on business and how workers can be supported.
