The Rising Demand For Timber
The global demand for timber continues to soar
Demand is soaring and supply is reducing, pushing timber prices up and up
At the recent Global Timber Conference in London, the topic on everybody’s lips was the future ‘black hole’ for timber supply. The growing demand for timber from rapidly developing countries such as China, India and South Korea, alongside the historic global demand, continues to rise exponentially. Demand is soaring and supply is reducing, pushing timber prices up and up; and it’s easy to understand why.
China’s projected urban population explosion from 575m to 1 billion is expected to use all of the timber currently available per annum. To house this ‘housing shift’, China is expected to build up to 50,000 skyscrapers and 20 mega cities. It's being funded by The World Bank, it's going to happen.
The Chinese government predicts the total wood fibre demand on a round wood equivalent basis (RWE) will reach 350 million m3 by 2015. With domestic output forecast at just 200 million m3, there is a potential supply “gap” of 150 million m3 RWE (or some 25 billion bf, Scribner scale) that will need to be met by imports! In parallel, The WWF (World Wildlife Fund) reports ‘India is likely to face a severe shortage of supply of timber to meet its requirement both domestically and internationally.
It is estimated that demand for timber is likely to grow from 58 million cubic meters in 2005 to 153 million cubic meters in 2020. The supply of wood is projected to increase from 29 million cubic meters in 2000 to 60 million cubic meters in 2020. The supply of timber is mainly from forest plantations and wood production in India is showing a negative growth rate. In the absence of adequate supply from domestic sources, the nation has to depend heavily on imports to meet its demand for timber.’ Source WWF (World Wildlife Fund).
This obviously puts considerable pressure on the supply sources; consequently, illegal felling operations continue to escalate. The BBC news service states, 'As India takes steps to protect its forests in the fight against climate change, timber smuggling from Nepal is on the rise, Nepalese conservationists and officials say. They say this increase in smuggling is the result of growing demand for timber from the Indian market'. Source - BBC News online 29 September 2010.
Why timber investments make sense...
Everyday, more startling news appears highlighting the benefits of investing into sustainable timber. Ethical Forestry are currently purchasing multiple plantations in Costa Rica to facilitate our private and institutional investors requirements.
By investing in sustainable plantations, our investors are purchasing a safe, secure investment with dependable growth. Together we are creating an alternative supply source and helping to alleviate the pressure on the existing natural rainforests.
