1) The steadily increasing demand for tropical hardwoods
for beautiful furniture, cabinetry, expensive boats, and other fine woodworking items, assures a ready market for the tropical hardwoods produced from the plantations.
2) The price trend of specialty tropical hardwoods is strongly
upward. According to data published by the United Nations, the export/import price of
teak, for example, is today nearly 7 times what it was in 1970. And according to the Wall
Street Journal, a single teak log can now bring as much as $20,000.
3) The world's rainforests will be either protected, or
destroyed. Either way, tropical hardwoods will continue to become increasingly scarce. It
is reasonable to conclude that tropical hardwood prices, and the profitability of tropical
hardwood plantations, will continue to accelerate.
4) Awareness of the importance of preserving the remaining
rainforests is increasing. Environmentalists are urging that we buy only products made
from sustainably-grown tropical hardwoods. Growing environmental and political pressures
are likely to increase the demand for, and the price of, plantation-grown tropical
hardwoods even more.
5) The supply is known. Modern high-resolution satellite
photography permits scientists to inventory the world's rainforest resource, and to catalog
its destruction. There can be no sudden discovery of a new supply of rainforest to
negatively impact tropical hardwood prices, such as can happen with natural resources
hidden beneath the earth's surface.
6) 99% of the tropical hardwoods consumed in the world today
come from the rainforests. Only 1% comes from plantations or tree farms. With
intense competition for useable land, it is unlikely that the number and amount of
tropical plantations will increase substantially. Even if the amount of tropical
plantations in the world suddenly doubled, or even tripled, all together they could supply
only 2 or 3% of the world demand.
7) Trees in the tropics grow much faster than in the
temperate parts of the world.
"A plantation in Canada generates only between 3 and 5 cubic meters of wood per
hectare per year, and in northwestern United States the average is between 5 and 8 cubic
meters. In the humid tropics, several fast-growing tree species produce wood at a rate of
at least 20 cubic meters per year, a volume that can be obtained only from ten times as
large an area of natural forest." 2
8) The tropical hardwood trees growing naturally in the
rainforests may take decades to reach harvest size, and even then, because of adverse
growing conditions, they may be of poor form and not produce a quality log. In tropical
plantations, the experience is much different. Depending upon the species, the first
harvests can begin in 6 to 8 years, and quality care results in superior trees with better
form and growth rates as much as several times faster than trees growing at random in the
rainforest. These well-cared-for trees with better form are also much more likely to
produce premium-priced veneer quality logs.
9) The cost/reward ratio of growing tropical hardwood trees
can be very attractive. The cost of planting and caring for a tropical hardwood tree for a
25 year life is less than $35. That same tree may produce hundreds if not thousands
of dollars of tropical lumber. Relatively low labor and land costs for growing tropical
hardwood trees, coupled with the increasing prices for tropical hardwoods, make planting
and growing tropical hardwoods a uniquely profitable opportunity.
