Investing in Timber

[David Knight]

planbtotrade, that article seems like an excellent overview and provides a lot of useful information.

There are two points that come to my mind after reading it.

For one, the hectare is the standard measure of land area used in that, and other, articles. For the benefit of those that don't know (I didn't), a hectare is 10,000 square meters, (such as a square 100 meters on each side, or a little bit more than two American football fields excluding the end zones). TATF says that they plant teak on a 3 meter by 3 meter grid, which ought to be approximately 1025 to 1470 trees per hectare (depending on the planting pattern -- a rectilinear grid will have about 1025 trees and an offset grid (equilateral triangles 3 meters on each side) will have about 1470 trees. (I don't know which planting pattern TATF has used.)

The other point is that the prices the article gives for harvested teak are for seed grown teak after 20 years (rather than 25) sold as logs (rather than sawn and dried lumber, and certainly not for high volume low labor value added products such as tongue and groove floor board planks). From what I've read elsewhere (I believe the ITTO - International Tropical Timber Organization), the value of sawn and dried wood is anywhere from two to five times that of logs (for the same volume of wood).

So, given those two factors, it seems reasonable that the returns from TATF may be substantially higher than that given in the article for 20 year old logs.