"Indeed, as an asset class, timber - a renewable resource with constant product demand - stands out as a remarkably stable investment."
"Timber's qualifications as a solid investment are too impressive to dismiss."
Bloomberg Wealth Manager
"The Growth in Trees, Timber's New Place in the Diversified Portfolio" December 2001 / January 2002 Worldwide demand for teak is growing while inventories from native suppliers are rapidly shrinking. Teak is native to primary producers India, Myanmar (Burma), Thailand and Indonesia. These countries are faced with dramatic reductions in available supply as natural forests have been depleted and government regulates the industry. The World Bank forecasts a 6% annual increase in the price of all grades of “First Quality” and “Rough Sawn” teak for the foreseeable future. As a result of the market opportunity, since the mid-1990’s teak plantations have started up in Central and South America and northern Australia, regions with climates that mirror native teak forests and soil make-up.
"Average annual returns on timber . . . have outstripped those from leading global stock indices, property, oil and gold for the past decade."
"As 'green' awareness rises around the world, timber looks more attractive than ever." The Economist: "Timber as a growing asset class" February 5, 2007
Historically, according to the United Nations FAO publication Forest Products Prices, the median prices of teak rose at an average rate of 9.7% per year for the 18 years from 1970 to 1988 (the final reporting year), and 13.2% per year for the last four years of the report.
The January 15, 2008 ITTO Tropical Timber Market Report shows the US imported sawn wood prices for “Rough Sawn” teak lumber is $1,625 per cubic yard, or $5.01 per board foot. In the same Market Report, the price reported for “First Quality” teak lumber in the U.K. market is $3,181 to $3,673 per cubic yard, or $9.81 to $11.33 per board foot. Additionally, young teak (trees generally under 13 to 14 years old), in comparison, currently sell for about $0.95 per board foot, up four-fold over the past several years.
"The UN Food and Agriculture Organisation predicts world consumption of industrial wood will rise 60% over the next 25 years" "over the past century the price of wood has averaged an annual increase of 6%"
Moneyweek "Timber investors are barking up the right tree" July 7, 2006
Even though a percentage of the harvest at Banana Bank will deliver high priced, “First Quality” teak, the business proposal bases all revenue projections on Rough Sawn pricing, Sawing Grades 1 down through 4. Based on 6% annual inflation through 2020, a cubic yard of the highest grade Rough Sawn teak would sell for $3,269 ($10.09 per board foot) – when Banana Bank Ranch’s teak plantation will be 22 years old.
“. . . Research indicates that real prices for timber have steadily risen for more than 100 years - better performance than any other commodity . . ."
"The track record of early investors - and a slew of recent academic research - indicates that timber is a near perfect asset."
Smart Money Magazine: "Timber!" November 2001
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