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Timber Prices set to continue to Rise, claims FRA
FRA has welcomed a report from Investorplace.com, claiming that timber prices are not set to fall in 2013, making the asset class a good bet for investors looking to diversify this year.
By: Forestry Research Associates
There are several reasons that the article gives for retaining faith in timber prices in the US. Writing for Investorplace.com, Aaron Levitt says, 'Driven by several forces - including a rebound in the US housing market, expanding pulp sales and a few issues with Mother Nature - timber became the commodity du jour during the last year.'
He goes on to talk about the gains in the US housing market that are expected this year. Increases in house prices in 2013 will be the first since 2006 and, in response to this, new home building is up by an impressive 42 per cent on a year ago.
This increase in housing starts is the main reason for the increase in lumber prices, according to Levitt, and FRA has welcomed this news. Its analysis partner, Peter Collins, said, "The knowledge that 42 per cent more homes are being built than a year ago in the US is a strong indicator that timber prices will be on the up in 2013 and beyond."
"Now is great time to invest in timber and timberland for a medium and long-term investment that is likely to diversify a portfolio against risk and act as a hedge against inflation," he went on to say.
To illustrate this point, the price of framing timber, which is used in new homes, has increased by 38 per cent in 2012 to around $373 per 1,000 board-feet.
FRA supports a wide range of sustainable, environmentally friendly alternative investments, including investing in sustainable plantations of non-native trees in Brazil and Canada. Investments in these kinds of plantation can be taken out through firms like Greenwood Management.
About Forestry Research Associates
Forestry Research Associates is a research and advisory consultancy that focuses on forestry management, sustainability issues and forestry investment around the globe.
Forestry Research Associates
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Bainbridge Island, WA 98110
(206) 316 8394