Australia was for many years the world’s leading exporter of wood chips and the major supplier of wood fibre to the pulp industry in Japan, which was the largest importer of wood chips in the world. This changed in 2012 when Australian exports fell to their lowest level in over ten years and Vietnam took over as the largest supplier of wood chips in the world.

There is no lack of wood supply in Australia, rather it is the demand for chips from the export market that has changed. It is primarily the demand for chips in Japan that has diminished, and had it not been for China’s increased wood fibre demand, the picture would have been even bleaker for Australian chip exporters.

However, over the past six months, shipments of wood chips from Australia have rebounded and volumes exported in the Q4, 2013 and the Q1, 2014 were the highest quarterly shipments since 2010. The biggest reason for the increase has been China’s need for wood fiber for the country’s pulp industry.