FRA welcomes Prediction of Timber demand increase
A recent report in the Financial Times has provided a boost for the forestry investment industry, as it outlines how timber demand could increase by 55 per cent by 2050, according to FRA.
Bainbridge Island, WA, March 29, 2012 - A recent report in the Financial Times has provided a boost for the forestry investment industry, as it outlines how timber demand could increase by 55 per cent by 2050, according to Forestry Research Associates (FRA).
The feature begins by talking about how sustainable forestry investments are “flourishing” as the commodity’s value will rise “exponentially” as demand starts to exceed supply.
The increase in the demand for timber will result from the growing population and the increasing wealth of highly populated nations such as India and China, whose demand for raw materials is on the up as they invest billions in infrastructure and housing.
FRA’s analysis partner Peter Collins said, “We welcome the report from the FT, which plainly advocates investment in sustainable forestry projects as a viable, ethical and profitable alternative to traditional investments, such as stocks and shares, which are anything but reliable in the current economic climate.”
The report explains that biological growth means that tree value rises regardless of the market conditions for timber. When combined with the rising prices that are expected to result from the increase demand, investors could see huge returns for relatively small investments.
The FT also talks about how timber has been the only asset to experience price rises during three of the four market collapses in the past century. Forestry investment has, as a result, begun to attract those who are keen to diversify their investment portfolios with a asset class that is not aligned with general economic trends
Through projects like those run by Greenwood Management in Brazil, individuals can invest as little as EUR 10,000 to buy their own section of plantation land, which will be devoted to growing non-native, sustainable trees for domestic use and export to emerging economies. Mr Collins added, “Sustainable forestry projects also help to add to the earth’s carbon sequestration capabilities and contributes to habitats and green space for people and animals to enjoy.”