Wednesday, April 24, 2024

Rule change on logs could kickstart India trade

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Fumigation on ship or destination could give logs to India trade a boost.
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A resumption of the log trade to India could be on the cards if a trial period granted by MPI proves to be successful.

New Zealand has enjoyed a moderate level of export success in the past with log exports to India which reached their peak in value prior to covid-19 pandemic. 

But the implementation of new regulations in NZ banning the use of methyl bromide fumigant as a treatment for export shipments brought it to a stop. 

Prior to this, trade volumes had peaked at 1.7 million cubic metres of timber a year valued at about $250 million. This compares to annual Chinese exports of about 19m cubic metres, and 2m cubic metres to Korea a year.

But the decision by the Environmental Protection Authority (EPA) to ban the use of methyl bromide as a fumigant in NZ bought trade came to a standstill. However Indian regulations stipulate methyl bromide must still be used, with no alternatives proposed.

Earlier this month MPI updated its phytosanitary requirements for Indian log exports, allowing fumigation of logs in ships holds on arrival in India in lieu of treatment prior to sailing from NZ. 

The trial period has been granted from September 15 to October 31.

But one forester said it was unlikely the sector would be rushing to the Indian market quickly.

“This represents a good opportunity, it’s a good result but there is still a lot of water to go under the bridge yet before we see a return to the earlier volumes to India,” Mark Proctor of TPT Forests said.

He suspected most exporters would take a wait and see approach to the market which still represented a relatively small portion of NZ’s 20 million cubic metre a year export trade.

“And it is not likely to return to that 1.7m cubic metre level quickly.”

Shane Olsen, manager of plant exports at Biosecurity NZ, confirmed the update and said the interim option is an opportunity for bulk shipments of logs to resume following the prohibition of ship hold fumigation in NZ that took effect on January 1 this year.

“The interim option is available until October 31 this year to enable India to consider alternative treatment options for NZ logs to India,” he said in a written response.

A recent trade delegation to India had resumption of a log trade on its agenda, subject to some compromises being reached around how the methyl bromide issue would be dealt with.

During the delegation’s visit minister for trade and export growth Damien O’Connor had acknowledged a joint effort to find a feasible alternative that allowed the importation of logs from NZ. 

NZ had also granted access to Indian mangos on the same trip.

Forestry sector insiders have confirmed the export of unfumigated logs to India remains a risky proposition, with uncertainty over the exact cost an exporter’s log shipment may face on arrival in India to have the load fumigated.

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