At “Forestry Invest” this year, it has been a pleasure to witness a genuinely friendly forestry investment community developing. Despite some of the fundamental differences people have in their views, polite debate has always prevailed here and in the majority of cases, opinions have been emailed in on a very civilsed basis, so thank you.
I am more convinced than ever that by selectively and carefully researching investments in forestry, investors will be able to reap significant rewards , given the predictions for global wood energy demand. The additional bonus of protecting the world’s natural forestry assets also appeals to many an ethical investor, as a result of the highly efficient timber yields from professionally managed plantation forestry investments.
Clonal or genetically modified (GM) forestry has attracted a good deal of attention from the worlds media opf late, and has prompted a few heated emails into “forestry invest” to boot. Eucalyptus and Poplar tree farms have been targeted as particular species to create enhanced yields from. From my own perspective I think it sensible to keep an open mind to all opinions, but I am mindful of the fact that there will tend to be a human element of resistance to change in most areas. We seem to accept efficiently grown fruit and vegetables, almost all the products on our supermarket shelves have undergone modification to meet the growing demands the worlds population boom has put on agriculture. Without the increased yield in wheat etc, we would be facing a huge deficit in production with a un unpalatable dilemma as to how to address the problem . The current population of the world is in the 6-7 billion region and is forecast to hit 9 billion by the middle of the century. It is easy to dismiss statistics as there are so many sloshing around, but 3 billion more mouths to feed and homes to build for and energy to supply is no small matter. Do we control birth rates or increase productivity? Resistance to change is a natural process in us all, but significant investment in better forestry yields seems requisite and, in so doing, this will protect the natural forestry we cherish and have so mistakenly taken for granted.
Many different sources of energy will be needed over the coming decades, but sustainabilty is keyword nowadays if we are to learn from the mistakes of the past. Fossil fuels are not infinite resources and, with the benefit of hindsight, that’s probably just as well. Oil and coal have much to answer for in our planets current climate problems. Over in Copenhagen, governments, industries, environmentalists are duty bound to come away with some solution to address the problems posed by excessive carbon emissions. As far as the forestry investments are concerned, they have been highlighted as one of the most important matters to be resolved. We can debate the merits of about deforestation until the cows come home, but unless we are prepared to change our lifestyles, (which is wholly unrealistic in my view), the world is going to become increasingly reliant on wood/timber/forestry products in its many forms for the forseeable future.
To digress a little from forestry matters for a moment, the paperless world is area I have tended to steer clear over the years, since I am not one of the most IT savvy folk. But, like everyone else nowadays, I am slowly becoming slowly conditioned to getting much of my personal information paperlessly via the internet. I have even recently been bought an “e reader” ( a sort of laptop for books for want of a better description). Book content is instantly downloaded to the electronic devive. No more browsing in the local book shop or library? .A passing fad or the final death knell for the paperback industry and high street retailer? It does seriously beg the question as to whether the publishing world and paper industry will have to adapt in a similar way to the music industry. Will there be literature file sharing in the way music has struggled against copyright theft? Apparently the Amazon Kindle (the latest e reader) has been witnessing huge sales in the USA, with downloaded books becoming the norm for the next generation of book readers. A concept many literature traditionalists thought would never come to fruition.
Some of the so- called “fads” which some have cited as being a passing phase are now completely embedded in our customs. We book our airline travel on line. No more tickets, no more posting confirmations. The paper and pulp industry is having to adapt to the changing nature of this switch to paperless systems. The construction markets are cyclical with demand for wood swinging hugely over these cycles. The US construction market almost ground to halt with wood demand crashing. . Recovery in the industry is forecast to be slow, but nevertheless, seen over the long term it is hard to see general levels of demand reducing.
So looking back over the year 2009 as far as forestry is concerned, for me the outstanding forestry news of 2009 has been the underlying fact the fact that wood energy markets are now clearly presenting the oustanding case for investment within the forestry sector. This has been really re inforced up by some of the big hitters in the forestry investment community of particular note RISI, probably the highest authority on world timber trends. They have produced an outstanding report outlining the future trends for wood energy. I believe investors in forestry will witness an ever growing case for wood energy investing in its various forms in 2010 and well beyond. I hope to continue to keep our readers here as up to date as time allows.
As the holiday season is almost in full swing, I want to wish all the readers of ” Forestry Invest” a very Merry Christmas and hope to be able to build on the success on this web log in the New Year.
John
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