Great Southern Ltd has announced a new price agreement for the sale of hardwood woodchips to Japanese pulp and paper customers for the 2008 calendar year.
The new price of A$207.40 per bone dry tonne (BDT) was agreed for plantation hardwood supplied from the Albany region in Western Australia. This price represents an increase of $18.00 per BDT - almost ten per cent more than last year's price.
The agreement follows yesterday's announcement by Futuris Corporation subsidiary, ITC Ltd, together with Timbercorp Ltd, regarding their negotiations to increase the benchmark sale price of certified plantation grown hardwood woodchip with the Japanese to A$207.40 BDT. .
These negotiations were undertaken by Plantation Pulpwood Exports, 50:50 a joint venture woodchip marketing entity between ITC and Timbercorp.
Great Southern executive director Cameron Rhodes said it was the largest price increase for Australian woodchips since the hardwood plantation industry began negotiating its own woodchip prices in 2002 and highlights the growing demand for high quality wood fibre.
"This price is excellent news for investors in our plantation projects, whose trees are approaching harvest maturity," Mr Rhodes said.
"The higher price will increase the return achieved for every tonne of woodchips sold to purchasers."
Plantation hardwood woodchips have a higher pulp yield and are generally more efficient to process than native timber, commanding a premium price. They have become the preferred product in a growing number of markets, particularly with the Japanese industry.
The price increase comes less than three weeks after Great Southern signed a five year contract with major Japanese pulp and paper company Hokuetsu Paper Mills Ltd for the sale of woodchip from the hardwood plantation estate it manages on behalf of its investors in the Green Triangle region of south west Victoria and south east South Australia.
Under the contract, up to 400,000 tonnes of woodchip will be exported annually to Japan, starting in 2009
