The woodchip and log sector remains ''roughly in balance'' at present, as the would-be southern exports for pulp and paper are being soaked up domestically in manufacturing medium-density fibreboard.
Director of chip exporter South Wood Ltd Graeme Manley said when contacted the soft wood chip market ''was not buoyant, especially around the Pacific rim''.
''Because of the market downturn last year, the market has changed,'' Mr Manley said.
Despite the downturn, Mr Manley was not aware of jobs being jeopardised in the South, as a lot of chipping was from ''sawmill residue''.
There was no ''mountain of woodchips'' piling up, as the slack of the overseas exports was being taken up by medium density fibreboard manufacturer Dongwha, in Southland, he said.
''It's all roughly in balance,'' he said of good export log prices for southern suppliers, against the woodchip downturn.
For the year to June 2011, the Southern Wood Council, representing Otago and Southland suppliers, valued all wood exports at $213 million for the regions, of which woodchip exports accounted for $21.2 million.
However, Mr Manley said compared to 18 months ago, the prices in China had fallen by 30% and at that price was ''unsustainable''. The problem with Japan was not so much the smaller downturn in price, but 30% decline in demand.
The last Port Chalmers export was about 15,000 tonnes to Japan, in January, which followed a 23,000-tonne export to China in November. The latter was considered to have possibly been the country's first export to China, but for the time being appears to be a one-off.
Port Otago has a wharf dedicated to stockpile woodchips and up to six vessels arrive annually to take aboard chips, but this week its wharves were bare of woodchips.
''Port Otago is using that area for containers. It's likely to stay that way until towards the end of the calendar year,'' Mr Manley said.
Japan had been a woodchip importer since 1977. Reasons for its 30% decline in demand on five years ago included its recent decision to thin its own domestic forests for chipping. There was also less demand for chips to make newsprint and for publishing, Mr Manley said.
There had also been an increase of exports from the North Island to Japan, he said.
China was a potential ''alternative market'', but it was considered a ''spot purchaser'', when the price was cheap, which was not sustainable at those levels for exporters.
