FSC certification and pricing update

a cocobolo tree in the Friends and Family plantation showing strong growthA cocobolo tree in our Friends and Family plantation demonstrating strong growthThe ITTO's most recent timber report included an anecdote about a Peruvian logging concessionaire receiving FSC certification for its operations in Madre de Dios. They noted the large enterprise could barely afford the certification and annual verification process, and is seeing no prospect of better pricing because of the FSC certification. This makes sense considering that India and China are major purchasers and are not as demanding regarding timber certifications. It appears that producers with more direct sales channels into the US and/or Europe are in a better position to capture the higher pricing that FSC certification provides.

While we manage our investor-owned plantations to exceed FSC certification standards we have yet to actually certify those plantations due to the high cost and the current small scale of our operations. Once timber production from our plantations begins, we will analyze the market conditions when production comes on line to see whether the price premium validates the cost of certification. 

The ITTO also reports that timber demand and prices are holding steady across the globe. Pricing for plantation teak (Panamanian included) arriving into the Indian market held steady after a recent bump. Flooring originating from China is now being hit by anti-dumping levies by the US, so that will potentially depress demand slightly. However, a long term study of timber needs in Australia was pointing to the lack of local supply and the need to increase imports in the future.