One retailer has recently increased the price of their blackwood timber by 15% or $1100 per cubic metre!!
Here’s a chart showing the old and new prices:
There’s no explanation given by the retailer for the price rise.
Is it due to declining supply, rising demand, or increasing costs of production? Or is it a combination of these factors?
Is the price increase likely to affect existing or potential growers?
If forestry operated under normal market conditions then a timber price increase of 15% would cause a significant response in the marketplace.
Under normal markets farmers would be doing their calculations and deciding if and how much to invest in growing commercial blackwood.
A 15% price increase should be stimulating new blackwood planting.
But forestry in Australia does not operate under normal market conditions. In fact forestry avoids “normal markets”. Using market forces to generate new investment is fundamental to any business.
Without my detective work these price increases would be largely unknown.
By way of comparison here’s a chart showing the price list for imported American Black Walnut offered by the same retailer:
Black Walnut is regarded as one of America’s premium appearance grade timbers. Most supply of this timber comes from private native forest owners in the eastern and mid-west United States, although some Americans are growing this species in plantations.
So this retailer at least regards blackwood as being on par with the finest hardwoods in the world.
So why isn’t that message (and the price) making its way back through the marketplace to help stimulate supportive policy and investment?