THE south-west's bluegum plantations have been dealt a blow by the world economic downturn.Japan, Australia's largest woodchip export market, has curbed its demand for timber pulp, resulting in a fall in exports from the Port of Portland.Four woodchip shipments worth about $16 million have been cancelled since November, the port's management revealed yesterday. Western Victoria MP John Vogels said he feared the slowdown would lead to thousands of hectares of bluegums across the region being left to rot.Timber companies yesterday told The Standard the plantations were still valuable."What we are experiencing is a short-term glitch," Great Southern forestry processing and marketing manager Tony Price said."There has been a softening in the market but we are not spooked by it. It's a fact of business . . . You just have to ride out the humps and bumps."Mr Price said the fall in Japan's market would delay Great Southern's harvest in the south-west from mid-2009 until early 2010.South West Coast MP Denis Napthine said he was confident the bluegum industry would rebound and deliver the hundreds of jobs it promised."The great thing about blue gums is they can retain their value in the long term," he said."They are still in the ground and can be still harvested at a more convenient time in the future."Mr Vogels said if demand for south-west woodchips continued to fall, plantations could turn into wastelands, become fire hazards and harbour weeds and vermin.He likened the situation to one that occurred in the 1960s and '70s involving small pine plantations."Just about every school used to have a pine plantation which they were told would turn into money," Mr Vogels said."Some of the early ones did but with the later ones, you couldn't even give them away. "The big companies weren't interested in them. "They weren't maintained and they just became a mess, with the wood no good to anyone."Mr Vogels said the biggest problem was not knowing how long the world financial crisis would last or if it would get worse."At the moment we are flying on a wing and a prayer," he said.While Wannon MP David Hawker said a delay in blue gum harvesting would hamper the region's economy, he was confident the trees would not rot."That's the beauty of a renewable resource. If you can't harvest them one year you could always do it the next," he said.Port of Portland chief executive officer Scott Paterson said he was bracing himself for a difficult year. A five per cent production cut at Portland's smelter and drought drying up grain supplies meant a decline in exports through the port, he said."But we are confident the blue gum story in the region will remain positive," he said."We have been told that the Japanese may stop using native hardwood chip and source more plantation chip, which would be good for us."The port is in the final stage of a new hardwood chip export facility which, when fully functional, will bring in $250 million a year."We are seeking finance for the project at the moment, which in the current climate might be a bit of a struggle, but we are confident we can get the funds to build it," Mr Paterson said.Tasmanian-based timber company Gunns, which has a woodchip export facility at Portland, and south-west plantation owner Timbercorp maintained there was still a demand for their products and business was operating normally.