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  • Growth of acacia, casuarinas, eucalyptus and poplar

    2009 - 12.09

    There will be a significant need for investments in forestry in India as demand levels for timber are rapidly rising and,  although India possesses many of the world’s  most valuable commercial timbers (eg Teak, Rosewood, Sandalwood),  a strict conservation policy is currently in force which severely restricts forestry  harvesting.  Indias industrial demand for timber has risen from 58 million cubic metres in 2000 to almost 85 million cubic metres in 2008,  and forecasts suggest this demand  will increase further to reach 150 million cubic metres in the next ten years.

    India still remains a net importer of forestry products and its wood manufacturers prefer to import the timber in log form to supply its domestic industries. The majority of India’s forestry imports are from Malaysia, Indonesia, Nigeria, Ghana,  Brazil, Panama, Costa Rica, Ecuador and New Zealand.

    Indian wood panel industry requirements are mostly met by plantation-grown forestry although natural forests still supply them to a lesser extent.  Significantly,  forestry plantations of eucalyptus,  poplar, casuarinas and acacia are rapidly gaining public approval and the by product of preventing illegal felling from state forests must be welcomed by all environmentalists.

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    2 Responses to “Growth of acacia, casuarinas, eucalyptus and poplar”

    1. Jeff Duda says:

      One of the best yielding and more neglected investment classes of timber is the high value commercial timber plantations (teak and other tropical hard wood investments) Many of these species grow rapidly (20 to 30 year rotations) While this sector of the timber industry is relatively small it provides a very good investment opportunity for investors in the range of $100,000 to $1 million. Due to the small size of this overall sector of the timber industry it is not well suited for the large institutional investors, but can provide very good yields for smaller long term investors. Teak is one of the most valued woods in both China and India which are quickly depleting their natural resources and have largest part of the world’s population and fast growing economies. As with all investment choices one needs to learn how a company is structured and what they get for the investment. I feel for the savvy small investor this is one of the best sectors of the timber industry to invest in at this time.

      As with all investments the investor should first invest the time to become educated in how to evaluated timber investments so they can make a educated investment decision based on reality.

      Basically there is a lot of miss information out there that is used to sell $10 worth of timber investment for $50 and the investor loses 80% of the investment up front. Get past that and teak is one of the best things going at this time in terms of safety and yield, only drawback is that it is long term and not real liquid.

    2. Thanks for your thoughts Jeff. In many respects I concur with much of what you say with regard to appeal of high yields from high value commercial timber for the smaller investors in forestry plantations. (I am talking my own book here since I am one such an investor!). The purpose of this site in the main, is to encourage timber investors in general to look around the various options for investing into forestry markets, and share as much information as I can to provide as broad a view as possible as possible to make some informed decisions if investing in forestry. I do receive many emails from small investors (relatively speaking), seeking advice etc, but my objective is to put as much information as is possible in the limited time I have for investors to make their own decisions and do their own research.

      Re your comments on China…there are a number of articles around at present relating to massive changes in building regulations in China enabling timber-framed housing construction ( for the first time). The scale of demand for timber in new builds and for furniture within the houses could well be unprecedented with lumber futures surging on the news.

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