Australian eucalyptus exports reach record highs

China has overtaken Japan as Australia's main export market, driven by demand and competitive pricing.

Levels of eucalyptus chip exports from Australia have risen by 58 percent in the three years leading up to 2015, according to a report.

Chinese pulp mills have driven increasingly large orders from Australia, now the fourth largest hardwood chip exporter by volume in the world, according to Wood Resource Quarterly.

Australia exported 5.2 million tonnes of hardwood chips, almost all eucalyptus, last year. China consumed about half of those exports in 2015, compared to 13 percent in 2010. The 5.2 million tonnes is a 15 percent year on year increase, represents about a third of the world’s hardwood chip exports and was valued at nearly A$1 billion ($750 million; €670 million) in the report.

In the last five years, China has also surpassed Japan as Australia’s main eucalyptus export market. Exports to Japan fell from about 3.6 million tonnes in 2010 to 1.9 million tonnes in 2015. Between 2011 and 2013, the price for landing chips in China was about $50 lower per oven dry metric tonne than for chips delivered to Japan. However, this gap has narrowed significantly since 2014.

The largest final close in timber in 2014 was New Forests’ A$707 million Australia New Zealand Forest Fund II (ANZFF II). New Forests is expected to complete investing ANZFF II this year and raise a third fund of similar size. Other funds investing in forestry in Australia and New Zealand include those managed by secondaries specialist Stafford Capital and international investor Global Forest Partners.

Source: Macquarie Forestry Services.