China will pay on average 11 per cent more for Australian woodchips next year, after Aussie forestry company Midway secured commitments from Chinese customers for a price increase.

Midway (ASX:MWY), headquartered in Geelong, is Australia’s largest wood fibre exporter. China takes two-thirds of its exports, with Japan picking up the other third.

The company told investors this morning that recent contract negotiations had led to major Chinese customers agreeing to an average price increase of 11pc for Midway woodchip export volumes in the first half of the 2019 calendar year.

The increase will see Chinese customers paying on average $252 per bone dry tonne for Midway’s flagship eucalyptus globulus woodchips. Midway says this will have a “positive impact” on its bottom line.

“The price increase reflects tight wood fibre supply in Asia and continuing strong demand for wood fibre in China for a range of paper products, high quality cardboard used in consumer product packaging and rayon for clothing,” chief Tony Price said.

“This price increase and expected future demand growth is a very positive sign for future plantation development in the areas in which we operate.”

Midway shares rose 7pc to an all-time high of $3.33 on the news.

Midway (ASX:MWY) shares have hit an all-time high.

It’s been quite the turnaround from the start of this year, when two delayed shipments hit first-half profits.

The company posted a $21.4 million profit for the 2018 financial year, up 86 per cent on the previous year.