Category Archives: Prices

IST Tender Results 2018-19

It’s time for my annual summary of Island Specialty Timbers (IST) log tender results.

http://www.islandspecialtytimbers.com.au/

https://blackwoodgrowers.com.au/2018/07/07/ist-tender-results-2017-18/

This is the only competitive market, log price data publically available anywhere in Australia.

I began this series of articles in 2015 hoping to start a discussion in the community about forestry, log markets and prices, and the concept of profitable commercial tree growing.

I wonder if I’m succeeding?

Results

IST had a good tendering year in 2018-19 with both increasing sales and prices.

IST conducted 9 tenders during the year putting a total of 147 cubic metres of special species logs and craftwood to competitive tender, in the only transparent, competitive forest product market in Australia. Hooray for IST!!

The IST tender results for which I have data are shown in the following chart. As I’ve said previously it’s difficult to draw conclusions given the wide range in size and quality of products that IST puts to tender. Perhaps it could be said that maximum log prices seem to have increased over the last 18 months. The same can’t be said for average or minimum prices.

IST 2019 tender results

The following chart shows average sold log volume. There is a general trend of diminishing log size at IST that becomes obvious at the annual aggregate level…

Average sold log vol 2019

This year I’ve created the same charts as above but aggregated on an annual basis.

IST 2019 tender annual

2018-19 saw 147 cubic metres put to tender. 118 cubic metres were sold for total revenue of $150,860 at an average price of $1,276 per cubic metre. 29 cubic metres of sawlogs and craftwood were unsold at tender.

Standout results for 2018-19 was a 2.48 cubic metre black heart sassafras log that sold for $4,075 per cubic metre and a total price of $10,103 at the January 2019 tender!

The following chart confirms that log sizes are falling at IST, halving in the last 4 years! People are paying higher prices for smaller logs. Is this an indication of sustainability? I think not!

IST 2019 tender annual log vol

Blackwood

Log27 1018b

IST put a total of 14.7 cubic metres of blackwood logs to tender in 2018-19 of which 8.2 cubic metres sold. 4.8 cubic metres of the sold blackwood logs contained figured grain, the remaining logs were plain (straight) grain. The following chart shows annual plain grain, blackwood sawlog tender results for which I have data. These are tiny volumes in a small domestic Tasmanian market.

IST 2019 blackwood prices

The chart shows a steady increase in average tender price for plain grain blackwood sawlogs over the last three years. The average price in 2018-19 was $727/m3! Also note that good quality plain grain blackwood logs have been selling for over $800/m3 for a the last few years.

At these prices a well managed blackwood plantation is worth over $200,000 (at mill door) per ha after 30 years!

My focus is plain grain (as distinct from feature grain) sawlogs because these are equivalent to what can be grown in a well managed commercial blackwood plantation. The target blackwood plantation sawlog is pruned to over 6m height with a volume of 1.5 cubic metres, and a small end diameter (SED) of 50 – 55 cm depending upon stem taper.

The following chart shows the average volume and small end diameter of plain grain blackwood logs sold by IST at tender. These logs are equivalent in volume and SED to what can be grown in a commercial blackwood plantation.

IST 2019 blackwood vol SED

Standout blackwood results for the year were:

  1. A massive 3.1 cubic metre figured grain log that sold for $800/m3 for a total price of $2480;
  2. A 1.5 cubic metre plain grain log that sold for $800/m3 for a total price of $1200. This log measured 5.5m length, 52cm SED 75cm LED. This is equivalent to a target blackwood plantation log.

Given that blackwood comprises 95+% of all special species harvested from public native forest, IST tenders very little blackwood.

Tasmanian blackwood (Acacia melanoxylon) is the only special species product sold by IST for which this market data has any real relevance. Unlike the other species that IST sells, blackwood can be grown commercially in plantations. The Tasmanian Government is doing all it can to discourage landowners from growing commercial blackwood!

IST Price Archive

IST’s price archive table (see below) is out of date, as the above chart indicates.

IST blackwood price summary

Good quality plain grain blackwood logs are selling for >$800/m3.

As for short, plain grain logs here’s a chart showing the relationship between price and log length for the last 5+ years. Good luck if you can see any trend in that. I see short plain grain blackwood logs going for very good prices!

PriceVSlength

Blackwood logs with feature grain (birds-eye, fiddle-back, etc) can range between $200 and $2,900 / m3 depending upon the size of the log and the presence of other defects.

Caveats

  • These tender prices are effectively mill door prices that already include harvesting and transport costs. They are NOT stumpage prices.
  • Island Specialty Timbers (IST) is an enterprise of Forestry Tasmania Sustainable Timbers Tasmania established in 1992 to increase the recovery, availability and value of specialty timbers from harvesting activities in State forests.
  • Forestry Tasmania Sustainable Timbers Tasmania manages its special timbers operations (including IST) as a taxpayer-funded, non-commercial, non-profit, community service. Each cubic metre of blackwood log harvested by Forestry Tasmania received a taxpayer subsidy of $90! No private blackwood grower received any taxpayer subsidy.
  • 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).
  • It is unlikely that this tiny set of market-based blackwood log prices is representative of the broader blackwood market.

Indian Rosewood

And speaking of prices I must include my story from April about the record Indian Rosewood log price:

https://blackwoodgrowers.com.au/2019/04/15/rosewood-log-gets-record-price/

Assuming this is a plain grain rosewood log it is an extraordinary price of $AUD14,400 per cubic metre!

Rosewood log gets record price

RosewoodLog

https://timesofindia.indiatimes.com/city/kozhikode/rosewood-log-gets-record-price/articleshow/66172798.cms

This recent article in the Times of India caught my attention. That’s not surprising given my interest in log markets and prices.

The Indian Government has tight controls over the harvesting and sale of logs. These logs were Government owned. The Government retained the rights to the trees when the land was subdivided and sold.

The various State forest agencies in India conduct regular log auctions with the objective of improving market transparency, reducing corruption, and maximising the value adding for its forest products.

That’s right! Unlike here in Australia, the Government of India is not interested in subsidising sawmillers, boat builders and craftspeople.

East Indian Rosewood (Dalbergia latifolia) is a high value timber, and these numbers certainly confirm that.

Species: East Indian Rosewood (Dalbergia latifolia)

Log Class: I

Girth (cm): 246

Diameter (cm): 78

Length (m): 3.1

Volume (m3): 1.49

Unit price ($AUD): $14,400

Total price ($AUD): $21,500

No comment is made about the wood grain of the log, whether it was straight or feature grain.

I’ve converted the Indian prices to Australian dollar prices.

The log was purchased by Gemwood a company that amongst other products specialises in supplying the international tonewood market.

http://www.gemwood.com/

I wonder what impact such transparent competitive log prices have on the planting of trees in India? Do Indian farmers really plant rosewood trees knowing that in 100 years time someone will make money harvesting the trees? Do they appreciate that the rosewood trees they harvest today are due to the far-sighted benevolence of people 100 years ago?

In my 40 years as a forester I’ve never seen a newspaper article like this in Australia. That is because the forest industry in Australia believes that log prices and competitive transparent markets have no part to play in the industry’s future.

Across the Tasman Sea the very successful New Zealand forest industry has the opposite viewpoint.

Will we ever see prices like these for Australian logs?

And if we did would it have any impact on the tree-planting behaviour of our farming community?

When will Australia get a real forest industry?

PS. Just discovered this earlier news article about the harvesting of these rosewood trees. Certainly makes for an interesting story.

https://timesofindia.indiatimes.com/city/kozhikode/centuries-old-rosewood-trees-in-wayanad-face-the-axe/articleshow/63791118.cms

I wonder if that’s a Tasmanian record?

blackheart

At the recent January 2019 IST log tender a single black hearted sassafras log sold for $10,100!!

I wonder if that is a record price for a native forest log in Tasmania?

https://www.islandspecialtytimbers.com.au/

The log had the following measurements:

Length: 5.2 metres

Small end diameter: 71 cm

Large end diameter: 85 cm

Volume: 2.48 cubic metres

Unit Price: $4,075 per cubic metre

Black hearted sassafras is a slow growing rainforest tree native to Tasmania and Victoria.

Most black heart sassafras timber comes from unsustainable, taxpayer funded, public native forest logging in Tasmania, including the Government approved logging of Conservation Reserves.

Most Tasmanians and Australians don’t seem to care about Tasmanian forests!

Anyway it is an extraordinary price for a log.

IST Tender Results 2017-18

It’s time for my annual summary of Island Specialty Timbers (IST) log tender results.

http://www.islandspecialtytimbers.com.au/

This is the only competitive market forest log price data publically available anywhere in Australia.

General

During the year Island Specialty Timbers conducted 7 tenders putting a total of 154 cubic metres of special species logs, craftwood and sawn wood to tender.

Total sold volume was 99.8 cubic metres (65%).

Total tender revenue was $90,900.

201718ISTpricechart

The above chart shows the log volumes and log prices paid per tender. Craftwood and sawn wood are not included in this chart.

The large volume of unsold logs at the April 2018 tender was mostly due to a large parcel of Silver wattle (Acacia dealbata) logs.

201718ISTlogsizechart

The above chart shows the average volume of logs sold at tender by IST. For some context to this chart, the target plantation blackwood log is 1.5 cubic metres in volume (DBH 60 cm pruned to 6 metres). So it can be seen most of the IST logs sold at tender are small to very small in size.

The highlights for the year were a) a tiny black heart sassafras log (1.1m length, 30 cm small end diameter, 0.07 cubic metres volume) that sold for $3,800 per cubic metre. Indeed at this August 2017 tender 5 small BH sassafras logs totalling 0.54 cubic metres sold for a total of $2,025; and b) a very large huon pine log (4.3 cubic metres) sold for a total $4,623.

Two species attracted strong demand and high prices during the year, these being black heart sassafras (BHS) and huon pine, with average log prices well over $1,000 per cubic metre. BHS and huon pine made up 21% and 13% respectively of the sold volume. Blackwood and feature eucalypt/tas oak were the other major sellers at 18% and 23% of sold volume.

In fact 2 tear-drop grain tas oak logs sold for over $1,700 per cubic metre, an extraordinary price for a wood that the market generally regards as a cheap commodity.

Celery top pine sold for an average $580 per cubic metre (3.7 cubic metres total sold).

Silver wattle and blackwood made up 76% and 15% respectively of the unsold volume for the year.

So what can we say with three years of IST tender results in the chart?

Answer: Not much!

There is no apparent trend in price over the last 3 years. Sure the volumes are small, the market is restricted and the quality of produce is highly variable.

What can be said is that even given these limitations the market will pay very good prices for quality wood when it wants to, with maximum prices averaging $3,000 per cubic metre, even for tiny logs!

These tendered log volumes represent less than 1% of the special timbers annual harvest, and a mere 0.01% of the wood harvested annually from public native forest in Tasmania. The rest is sold at Government (non-market) prices on long term, perpetual sales contracts.

According to Forestry Tasmania’s Annual Report in 2016/17 IST sold a total of 829 cubic metres of product [tender and direct sales]. The annual report does not give separate accounts for IST so their income and costs are unknown.

Blackwood

Log8 102017a

In general the IST tender results provide little information that is useful to the marketplace with the exception of blackwood. Tasmanian blackwood is the only Tasmanian “special species” that has the potential to be grown commercially; the other species being too slow growing.

Sixteen blackwood logs (23.5 cubic metres) were put to tender in 2017-18 of which 10 were sold (16.3 cubic metres) for a total of $12,210.

Five of the sold logs (7.6 cubic metres), described as having figured grain, sold for a total of $7,460. These logs averaged 5.2 metres length, 57 cm small end diameter and 1.5 cubic metres volume.

The 5 plain grain logs (8.7 cubic metres) sold for a total of $4,754, an average price of $545 per cubic metre. These five logs averaged 6.0 metres in length, 54 cm small end diameter and 1.7 cubic metres volume. In other words these were good size, quality logs equivalent to what can be grown in a well managed blackwood plantation, which would produce approx. 300 cubic metres of high quality sawlog per hectare at harvest.

This is a very good price and a substantial increase on the last three years.

ISTBWDchart1718

The stand out blackwood results for the year were a) $1,300 per cubic metre for a 1.76 cubic metre log containing tear-drop figured grain, and b) $2,467 total price for a very large (2.53 cubic metre) figured log.

The unsold blackwood logs consisted of a) one huge figured grain log measuring 5.7m length 75 cm small end diametre and 3.4 cubic metre volume, and b) 5 plain grain logs averaging 4.3 metres length, 46 cm small end diameter and 0.8 cubic metres volume.

Remember these are tiny volumes in a small market (southern Tasmania). Whether they represent the broader blackwood market is unknown.

Remember these prices are “mill door” equivalent prices with harvesting and transport costs already “included”. They are not stumpage prices.

Also remember that Sustainable Timbers Tasmania/IST is a taxpayer funded community service organisation bringing these timbers to market from Tasmania’s public native oldgrowth and rainforests:

Tasmanian regional forest agreement delivers $1.3bn losses in ‘giant fraud’ on taxpayers

Softwood growers seek sector review

SWANpine

https://www.bdtimes.com.au/?news%2Fbusselton-dunsborough-times%2Fsoftwood-growers-seek-sector-review-ng-b88817681z

WOW!!

This must be the first time in my 40 year career as a forester that I’ve heard farm foresters openly complaining about Government control of forestry markets in Australia.

This is a unique event.

Hopefully this is the beginning of the major reform of the forest industry that is so desperately needed in Australia.

We really need to keep this discussion going.

And it’s not just about softwood prices.

It’s also about native forest log prices, and markets, transparency and competition.

It’s also about Government forest policy which is firmly focused on subsidising sawmills, and not about profitable tree growers.

This is true right around Australia!

I wish the WA farmers luck in their discussions with the State Government.

Even if you don’t succeed initially, keep the discussion going. Keep the campaign alive.

The fact that here we have farmers wanting to grow trees for wood production and yet we have Government policy directly hindering their efforts is beyond madness.

GOOD LUCK!

IST Special Timbers Tender 6 Monthly Update

Here is my 6 monthly report of IST special timbers tender results. My last report can be found here:

https://blackwoodgrowers.com.au/2017/07/27/ist-tender-results-2016-17/

The last 6 months have seen Island Specialty Timbers conduct 3 tenders with total of 42 cubic metres of product put to tender.

http://www.islandspecialtytimbers.com.au/

Total tendered volume sold was 34 cubic metres (81%) with total revenue of $34,000.

IST1217Chart1

The chart shows the price and volume trends over the last 2 years for the IST special timbers tenders. Sawn timber products are not included in the chart. Unfortunately the diversity and quality of products put to tender are so variable, and the volumes so small, that very little analysis is possible; except to say that the market is prepared to pay very high prices for premium quality wood.

Remember these prices are equivalent to mill door log prices, so harvesting and transport costs are theoretically included in the prices.

That these logs from Tasmanian public native forests are subsidised by Tasmanian taxpayers may also have some influence on the price.

The following chart tracks the average sold log volume. Many of the logs sold are very small. For comparison a target plantation blackwood log pruned to 6 metres with a dbh of 60 cm would have a volume of 1.5 cubic metres.

IST1217Chart2

With the Tasmanian State Government now giving away special timbers at taxpayers’ expense from Tasmania’s conservation reserves under the new Special Timbers Management Plan, we can expect log prices to drop dramatically.

Private forest growers are in for a tough time.

In fact I would think that IST’s days are well and truly numbered.

https://blackwoodgrowers.com.au/2017/10/23/tasmanian-rainforest-plunder/

Island Specialty Timbers, (IST) an enterprise of Forestry Tasmania was established at Geeveston in 1992 to increase the recovery, availability and value of specialty timbers from harvesting activities in State forests.

So much for “enterprise”! So much for “value”!!

More like complete market destruction.

 

Since this is my final report for 2017 I’ll take the opportunity to wish readers the best of Seasons Greetings.

The New Year brings another divisive and destructive State Election for Tasmania with forest policy yet again a hot election issue.

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

IST Tender Results 2016-17 addendum

https://blackwoodgrowers.com.au/2017/07/27/ist-tender-results-2016-17/

Looking at how small some of the IST tendered logs are, I thought I’d create a chart showing average sold log volume.

ISTSoldVol

For some context to this chart, the target plantation blackwood log is 1.5 cubic metres in volume (DBH 60 cm pruned to 6 metres).

So you can see from the above chart that IST sold logs are pretty small. In fact given that the chart shows the average volume, some of them are downright tiny (less than 0.1cubic metres).

That these small logs can command such high prices is quite extraordinary.

I’ll include this chart in future reports.