Planted Forest Investment Opportunities Expand Globally
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China's imports of logs, lumber, woodchips, and pulp hit record levels in 2011, when its timber supply deficit surged more than 30% to an estimated 152 million cubic meters, according to the new edition of Global Tree Farm Economics Review published this week by RISI, Brussels, Belgium. Similarly, demand for timber in other wood deficit countries (such as India) is also on the rise, the report notes, adding that while some countries clamber for wood resources, concerns about deforestation have caused an increasing share of the world's native forests to be set aside for conservation.
These global trends are increasing the market's dependence on man-made forest plantations (tree farms), according to RISI. Not surprisingly, an increasing number of players in the timber industry are interested in developing tree farms—often in new regions and with relatively unproven species. This type of investment requires analysis that incorporates political and economic factors as well as direct costs and biological growth rates, RISI adds.
"The study is a very useful reference tool to evaluate not just forest investments, but also to identify where investment is occurring, where it is likely to expand (based on which countries/species offer the best financial returns), and thus where wood fiber supply will be available in the future. The Review is specific enough to be useful, but broad enough to cover the very wide range of geographic and product variations in type of timber investment projects," explains Robert Flynn, director of International Timber at RISI and Study co-author.
More information about Global Tree Farm Economics Review is available online.
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