Ironing out NZ’s long-running methyl bromide dispute with India is the country’s top trade objective, according to NZ’s Trade Minister, Todd McClay, who is pushing to restore the $200m plus hole in log exports.
It comes as Wood Central reported, pre-Christmas, that both countries were keen to “solve the log export issue”, which has seen trade dive over a dispute over fumigation in transit.
“The trade minister of New Zealand appreciated the efforts made by India to sort out the issue related to [the] export of wooden logs to India,” Minister McClay said in a joint statement with Indian Minister of Commerce and Industry, Piyush Goyal.
Speaking to RNZ, Minister McClay said he is now confident that the conflict – which saw exports dive from $250m to just $28m (in 2021) – could be nearing a complete resolution following the successful fumigation trials conducted by the Ministry of Primary Industries (MPI), which saw the treatment of timbers occur in India rather than in New Zealand.
“Biosecurity New Zealand worked with India on an interim phytosanitary option for log exports from New Zealand, which allows fumigation on arrival into India,” adding that “this ensures trade can continue while New Zealand and India work on other treatment options.”
Until recently, India was among NZ’s top 3 markets for sawn wood, with NZ Forest Owners Association President Grant Dobson stressing its importance in protecting the country’s long-term interests.
“It’s vital to get back into India. The longer we are out of that market, the harder it will be to get back in,” Mr Dobson said last year.
In recent years, the Indian economy has emerged as one of the most important, if not the most important, global markets for structural timbers.
Yesterday, Wood Central reported that India is now the United States’ fastest-growing market for softwood lumber, with more than 116,000 cubic metres of timber shipped from the West Coast alone.
Along with New Zealand and the United States, Indian traders are also turning to Australia, Canada, Brazil and Uruguay to make up a shortfall of 33 million cubic metres of structural timber.
And that demand is expected to stay strong for years, with India’s increasingly confident developers speculating that the country is in the initial stages of a housing growth cycle.
“The housing market will perform well for another three to four years (at least),” according to Sanjeev Jain, the managing director at Parsvnath Developers, adding that property sales in India’s seven largest cities, including Mumbai, New Delhi and Bangalore, rocked 36% in the July-September quarter to 112,000 units.
From February 2022 until now, the NZ Ministry of Primary Industries has mandated the recapture or destruction of methyl bromide emissions at the end of fumigation – creating conflict with Indian authorities who insisted that timbers be treated with methyl bromide.
And whilst the NZ Environmental Protection Authority has pushed to replace methyl bromide with EDN fumigation, a successful trial late last year saw logs fumigated with methyl bromide at Indian ports instead of being traded before setting sail from NZ.
