Rudolf Freidhager © BaySF
Contract negotiations are still in progress, individual contracts with large customers have already been signed.
Quantity key to seller's market
The wood sector of Germany's south eastern province of Bavaria is governed – as all of Central Europe since at least mid-2009 – by the principles of a seller's market . Freidhager indirectly confirms that by saying that "we don't speak so much about prices, but rather about quantities" at present. The price increase he sees more as a price adaptation: "Inflation needs to be compensated for. I know the situation is not really good for sawmillers now. Yet it has slightly improved over the last year, so the new prices should be affordable for all. The gap between raw timber prices to lumber prices has diminished."
3 million sm³ softwood logs, but ...
Whereas lumber production in Austria has been declining for many years, it has steadily been growing in Bavaria. Log customers may expect a volume of nearly 100,000 sm³ per week in all grades to come from BaySF again in the current financial year for which the target of total harvest is 5.1 million sm³ – but also not more than that."We plan to harvest over 3 million sm³ of softwood logs again. Harvest volumes for spruce must once more be reduced by 50,000 to 60,000 sm³ for silvicultural reasons. We are fully exhausting our possibilities on the softwood side (spruce/pine), each ecologically harvestable cubic meter of it is placed on the market", Freidhager emphasizes (see last paragraph).
Clear on the beetle wood front
Beetle infested timber will not suffice for the BaySF to satisfy hunger of the sawyers. "Last year there was so little beetle wood like never before. This year it will be the third or fourth best year on record." Damaged timber – such as snow breaks – to a large extent goes directly to the center for energy wood: "There we achieve 100/t (absolutely dry) – and also revenues for previously unmarketable parts of the tree, such as the tops."The new financial year has been running since early July. During those eight weeks, the 800,000 sm³ were "sold at a very good average" price, Freidhager is content to say. Yet he refuses to sell timber via auctions on the internet: "We sell wood our way. Our direct customer contact promotes the sort of partnership that we want."
No need for "making wood"
The supply situation in Bavaria has worsened also because less and less wood came out of the small private forests. According to Freidhager, this amount is doomed to decrease further. "With low interest rates like these you only go to into the forest when you are in need of extra money."What makes utilizing the wood resources in Bavaria even more complex is the fragmentation of forest land – 500,000 of forest properties are below 3 hectares. "Already there are appeals from politicians to the owners: Please do not devide forest property among all children", says Freidhager.
Imports from the Czech Republic as last resort
If there is not more to be harvested in the BaySF and private forests, too, reduce their turnout, there is only one way out of the dilemma: imports. In the first six months of the year, 735.000 sm³ of the logs imported to Germany came out of the Czech Republic. That's 18% more than in 2012. 2008 that figure was as high as 770,000 sm³. For comparison, Austria imported 890.000 sm³ (+30%) from the Czech Republic in the first five months.A large part of the BaySF sawlogs which is now being negotiated will lead to long-term contracts. The quota for the direct marketing of individual BaySF forest enterprises to local sawmills for 2013/14 will remain at 26% – the same share as in previous years.
Booming industrial softwood timber
"Tense" (Freidhager) is the supply situation for coniferous pulpwood. As a result, prices for absolutely dry wood have recently picked up by double-digit euro amounts.At the time of the interview, negotiations on hardwood log prices had just begun. For beech, the BaySF expect stable or slightly increasing prices. The average price achieved for beech is 72/sm³ – firewood already is at 60/sm³, industrial wood at 50/sm³.Oak price might inch higher
"Especially for C grades, we expect oak prices to improve," says Freidhager. Yet average price increases of 20% as targeted by the Austrian private forest are unrealistic.Putting forests out of use is no option
Wilderness romanticism is gaining impetus as the German general election draws near. "Putting forests out of use – this is the most serious threat to the forest and wood industry. In this we must stand together", Freidhager was careful to piont out.The BaySF support the turnaround in the German energy policy with 30 wind turbines. There are not only altruistic motives to do that as the lease income from that end is considerable. Therefore, 30 more turbines are to be added in the current financial year. By 2020, the Bavarian Agriculture Minister Helmut Brunner wants to see that figure rise to 1,000 wind turbines. As the owner's representative this is like wildcard for Freidhager.
