Monthly Archives: June 2017

IST Blackwood Log Tender Results 2016-17

1617logs

In the interests of greater market and price transparency in the forest industry here is my annual summary of blackwood log tender results from Island Specialty Timbers (IST) for the 2016-17 financial year.

http://www.islandspecialtytimbers.com.au

This is the only publically available competitive market price data for blackwood logs.

During the year 20 blackood lots, totalling 20.4 cubic metres, were put to tender over 5 of the 8 tenders held by IST. That equates to 1 single truck load of blackwood material! Of the 20 lots put to tender only 6 were sold, totalling 7.2 cubic metres!

It’s been a quiet year for the local blackwood market.

Last year (2015-16) Forestry Tasmania sold 9,580 cubic metres of blackwood logs and craftwood, with the vast bulk of this volume sold on private long term sales contracts. The tiny volume sold through public tender by IST represents just 0.07% of the blackwood harvested from the Tasmania’s public native forest.

http://www.forestrytas.com.au/about-us/publications

For the August and September 2016 tenders IST put to tender 7 lots comprising pairs of blackwood logs. In the August tender the pairs were logs cut from single trees, whilst in the September tender the pairs were from different trees. All were plain grain logs. Only 2 of the pairs from the August tender sold.

None of the 11 blackwood lots from the September and November 2016 tenders sold!

Then came the March 2017 tender where 2 large blackwood logs from the same tree featuring tear drop grain were put to tender. Total volume for these two logs was 2.59 cubic metres. The larger butt log went for $1575 per cubic metre whilst the smaller head log sold for $1625. Total value for this single blackwood tree totalled $4130!! These logs provided the highlight in an otherwise quiet year.

Actually despite the low volumes sold plain grain blackwood logs didn’t do so bad. The 4 plain grain lots that sold averaged $418 per cubic metre for some reasonable quality logs, with prices up to $550 per cubic metre. I regard that as a good price.

The table below summarises the IST blackwood tender results for the 2016-17 financial year:

IST 2017 BWD summary table

The 20.4 cubic metres of blackwood put to tender compares with the total of 166 cubic metres of specialty timbers that IST put to tender in 2016-17, or only 12% of the total volume. This is despite the fact that blackwood is by far the dominant specialty timber harvested in Tasmania.

The chart below shows the average blackwood tender prices and total volumes for the past 4 years.

IST BWD pricevolume trend

Unfortunately the volume of IST blackwood tender material is too small and the quality too variable to allow meaningful market/price comparisons between years. Also IST generally only caters to the local southern Tasmanian craftwood market.

Large volumes of large, good quality logs from blackwood plantations should generally command better prices than shown by the IST result.

The blackwood market desperately needs more tradability, more transparency and more commercial credibility.

The only basis for a successful forest industry is profitable tree growers within a competitive, transparent marketplace.

Caveats:

  1. Island Specialty Timbers (IST) is an enterprise of Forestry Tasmania established in 1992 to increase the recovery, availability and value of specialty timbers from harvesting activities in State forests.
  2. Forestry Tasmania manages its special timbers operations (including IST) as a taxpayer-funded, non-commercial, non-profit, community service. Last year each cubic metre of blackwood log harvested by Forestry Tasmania received a taxpayer subsidy of $86! No private blackwood grower received any taxpayer subsidy.
  3. Note that all logs and wood sold by IST come from the harvesting of public native old-growth forest and rainforest certified under AFS (PEFC).
  4. It is unlikely that this tiny set of market-based blackwood log prices is representative of the broader blackwood market.
  5. The dataset is too small and variable in quality to allow any analysis or correlations to be made between price and log quality apart from the obvious result that feature-grain logs attract a significant price premium over plain-grain.
  6. These tender prices are effectively mill door prices that already include harvesting and transport costs. They are not stumpage prices.

So whilst Forestry Tasmania, the State government and the State parliament all regard the special timbers industry as a taxpayer-funded community service and political play-thing rather than a commercial opportunity, then blackwood’s commercial future remains difficult.

“The lack of price transparency for forest products, particularly from hardwood forests/plantations [in Australia], represents an impediment to the uptake of farm forestry. Unlike other commodities, price information for forest products is not published through the newspaper or accessible online. Better price transparency is required to encourage smallscale investment in trees” (p. 71. FWPA Report PN: PNA243-1112/2, 2013).

http://www.fwpa.com.au/rd-and-e/market-access/229-the-case-for-renewed-development-in-plantations-identifying-forest-values-and-the-constraints-to-attainment-stage-one-and-two.html

This quote from a recent forest industry report says it all. Even the forest industry recognises price transparency is a major issue, but then does nothing about it. One of the authors of this report was none other than the Director of Forestry Tasmania!

For previous years IST tender reviews see:

https://blackwoodgrowers.com.au/2016/06/23/ist-blackwood-log-tender-results-2015-16/

https://blackwoodgrowers.com.au/2015/06/18/ist-blackwood-sawlog-tender-results-2014-15/

https://blackwoodgrowers.com.au/2014/06/14/blackwood-sawlog-tender-results-2013-14/

 

The Green Shoots of Recovery

Green Shoots

Here’s a great article in the April edition (Issue 129, p. 41-46) of Acoustic magazine where Bob Taylor of Taylor Guitars talks about sustainable tonewoods.

http://www.acousticmagazine.com/

Green Shoots

In the article Bob Taylor makes some excellent observations and comments which I fully support. Here’s my selection:

there is plenty that smaller guitar manufacturers can do to promote sustainability. “Each guitar maker has the ability to do something,” he says. “If a guitar builder is large like Taylor, they should do ethical sourcing of wood and replenishing. A small luthier cannot replenish, but they can ethically source wood. One part of ethical sourcing is to care about the quality of life and the pay of the people closest to the wood. We must each know that our wood is coming from places where laws are followed and people are paid”.

Totally agree with this comment. I find it extraordinary there are so many luthiers out there more than happy to help keep plundering the worlds rainforests. Even in Tasmania and Australia this is true!

And the same goes for consumers! Please stop plundering the worlds rainforests!

If people think that growing trees is or should be charitable work, then they don’t understand sustainability at all. Are tomatoes sustainable? Of course they are, because it’s profitable to grow them. We just have to make trees profitable to grow. This will happen in many different forms, because in many industries like construction lumber or plantation teak, it is already profitable. Small operations such as our Paniolo in Hawaii, or Crelicam in Cameroon, attract attention. This magazine is interested, as are the readers, and so are some industrialists or landowners. We can· show that it can be profitable if you’re in the right situation to do so. In the case of ebony, we have to start it with investment from us, which looks like charity really, but others will be able to profit from it someday, and the sustainable cycle can start. Without selling something there is no sustainability.

But I do think it’s possible to farm guitar wood, if I can be so basic in my description.

A huge round of applause for these comments!!

That’s it! It’s all about profitable tree growing. Unless and until tree growing is profitable there will be no tonewoods in the future. Bob Taylor understands this.

That means paying higher prices than what we pay now for plundered wood.

 

This move [the recent CITES regulations around rosewoods] has already had an effect on Taylor’s guitars: “All the rosewoods we use will be used in lesser quantities and on more expensive guitars. Why? Because there is expense associated with using the wood and exporting and importing both the wood and the guitar. That expense for permits is the same for an expensive or a cheap guitar. Consequently, we’ll see fewer1ow-priced rosewood guitars in the market.

As rosewood is one of the major tonewoods used worldwide, this means that other species must now come into the market to replace the reduced supply of rosewood.

“no [tonewood] species now can be sustainable without a proper planting programme”.

Here in Tasmania we have no blackwood planting plan. In fact we have no blackwood plan at all. All we have is a plan to continue to plunder our public native forests using taxpayers money. For details see here:

https://blackwoodgrowers.com.au/2017/05/08/a-strategic-growth-plan-for-the-tasmanian-forests-fine-timber-and-wood-fibre-industry/

“I often say that most guitar buyers are environmentalists, except on the day they spend their hard-earned money on their dream guitar. But I forgive them and understand. If we work together, we will find a new excitement. We are working hard to make beautiful guitars that please all the senses”.

Farm grown Tasmanian blackwood has the potential to become a profitable sustainable tonewood, but it will be a long slow road ahead under the current circumstances.

Insanity …

LogTruck

http://tasmaniantimes.com/index.php?/weblog/article/insanity-1/

Here’s an excellent article by economist Graeme Wells on the failures and incredible waste of past and present Government forest policy in Tasmania. It makes for sober reading.

Unfortunately Tasmania’s political system only exacerbates the problem.

When will Tasmania get a fully commercial, profitable forest industry?