Australian logs have been shut out of the China market since about the beginning of November and Mr Dodson is holding his breath that the same frosting of relations does not happen to New Zealand.
"That’s a huge concern for us," he said.
"By and large our government seems to have handled it well so far."
He said he made his concerns clear to Minister of Forestry Stuart Nash.
"We don’t wish to be dragged into the China-Aussie dispute but, you’re only kind of one or two press releases away ... if one side takes offence, so let’s just hope that doesn’t happen."
The forestry industry in New Zealand would be significantly harmed if it was thrown into the same situation as its Australian counterparts, he said.
Overall it was a solid year for City Forests, the Dunedin City Council company posted an after-tax profit of $12.7million, down from $24.2million in 2019.
The drop in profit and dividend paid to the council ($4.5million, down from $8million) was due to deferred harvesting because of Covid-19 restrictions and a build up of European logs going to China.
City Forests ended up deferring 60,000 cubic metres of production.
"Of course it’s only a temporary cost because the trees are still growing and that is available to harvest later on, which is what we’re doing right now," Mr Dodson said.
Prices increased sharply after the Alert Level 4 lockdown as China returned to work and had used a lot of its inventory.
They moderated in June and July, but have been creeping upwards since, Mr Dodson said.
He expected production to increase over the rest of the year and into 2021.
City Forests was now increasing harvesting to catch up on what they deferred earlier in the year.
"Our budget for the 2021 year is to catch up with the volume that we lost the previous year."
"Log prices in China are on the move upwards and that’s as a result of the supply from Europe dropping off and the supply from Australia getting excommunicated and that has caused high demand and price increases for New Zealand radiata."
City Forests supply to the domestic market was limited to what local mills could take, Mr Dodson said.
"By and large the domestic mills get the best logs City Forests produced.
"In saying that there’s not enough domestic processing capacity to utilise all our harvest and that’s why the majority of it gets exported."
Mr Dodson said it was his understanding that sawmills in New Zealand had been going well with demand high over the few months since the Covid-19 lockdown.
He also said the Craigpine mill, which was a significant customer to City Forests, was not buying as many logs as it had been previously.
