Availability of Plantation Trees

IBISWorld expects the availability of plantation area to fall by 0.2% in 2024-25, representing 1.73 million hectares. This decline can be attributed to several interrelated factors, including increasing competition for land usage and changing land management practices. As urbanisation expands, agricultural land is often converted into residential or commercial developments, limiting the space available for new plantations. Also, economic pressures lead landowners to prioritise short-term profit from alternative crops rather than committing to long-term forestry investments, which can take years to yield results. This situation is compounded by the maximum emissions budgets decreasing yearly until 2035, starting at 71 million tonnes in 2024 and dropping to 49 million by 2035. The anticipated decline in plantation availability highlights the challenges of land competition and raises concerns about meeting these ambitious emissions targets.

Natural disasters have also contributed to the decreased availability of plantation trees in recent years. Cyclone Gabrielle in February 2023 caused considerable damage to apple orchards in the Hawkes Bay and Gisborne regions. While this specifically affected fruit trees, it highlights the vulnerability of plantation areas to extreme weather events. Furthermore, the forestry industry is grappling with weak timber demand, which puts pressure on the industry. The industry is facing a market downturn, which has reduced the national harvest cut to match the decreasing demand. This reduction mainly affects small-scale forest owners and regional private sectors, potentially losing skilled labour and infrastructure that may not easily recover when the market improves.