Reckless dumping hits prices

Exactly the situation New Zealand is trying to avoid in log marketing - unco-ordinated increases in supply from exporters when demand is weakening - cut Korean log prices in the second half of last year, said Fletcher Challenge Forests.

"It wasn't us," chief executive Terry McFadgen said. His company reduced supply when the "event" happened around September, October and November.

An anonymous writer in the Timber Industry Federation's December newsletter said a big exporter dumped 145,000cu m into the market in October and 120,000cu m in November when its normal volume was 100,000 to 110,000 a month in "the worst case of corporate incompetence I have ever seen in my 20 years in this business".

Fletcher Forests' chief operating officer, Ian Boyd, said a combination of small and large companies increased supply at the time.

Said McFadgen: "What happened in the Korean market is a classic example of why the industry needs to find the formula for more intelligent and co-ordinated behaviour."

Still, Fletcher Forests has opted not to join a move by Carter Holt Harvey and the receiver of the Central North Island Forests Partnership to set up an independent entity to handle log exports.

"We remain open to involvement," said McFadgen.