India, Japan and China account for a considerable amount of the consumption of tropical lumber, including teak, and it is this southeast Asian market which is growing at the highest rate. A large part of the raw material is further refined into furniture and maritime accessories for export. A great deal of the teak is used also for indoor use since it is popular and has qualities well suited for a tropical climate.Swedish imports have also increased. During the 1990’s Sweden imported 160,000 tons of raw stocks from tropical countries, which was twice as much as during the 1980’s. Imports of cut- and planed lumber from tropical countries have tripled between 1995 and 2001. (Source: Swedish Nature Protection Society)The price of teak is decided by supply and demand. A growing middle class in southeast Asia stemming from this area’s economic development is increasing demand faster than production, which results in higher prices. The average price increase over the past 30 years has been 6.6% according to the United Nation’s FAO office.
Becoming a shareowner
The number of trees
How to read the tables
Explanation of the first table
Column 2 represents the length of time of tree growth.
Column 3 shows different scenarios of increase for the market price of teak.
Column 4 shows how many square meters your investment comprises.
Column 5 shows the estimated cubic meters of timber of your investment.
The last column shows the yield of the investment.
It might be surprising that even 0% growth in market price gives a substantial yield. This is due to tree’s growth increasing the cubic meter mass of timber has a value in itself. The increase in value depends on the tree growing several cubic meters, which then increases the value of the initial investment.
Yield on investment
The diagram shows three investment strategies with respective yield based on 300.000 EUR.
1. Traditional bank saving.
2. Mean value from the 30 most traded shares at the Stockholm stock exchange.
3. Teak value at two different increase rates.
Contact Managing Director John Björklund for further information.
Telephone: (+46) (0)31 799 0997