Farmers to gain as weather worries drive commodity prices to new highs
Irish forest owners could be looking at gains as the Office for National Statistics in Britain said the inflation rate for wood products hit 13% in April, its highest level for more than a decade.
The British Timber Trade Federation estimated inflation was about 20% last year, while British dealers said the prices of sawn softwood have risen 30% in six months.
Because of shortages, traditional fencing panels are being offered to British DIY and gardening shoppers on the black market for up to €120 each, a fourfold mark-up.
DIY stores said the shortage is due to Scandinavia and Russian wood suppliers selling instead to China and Dubai, where construction companies are prepared to pay more. This is on top of existing softwood log shortages due to last year’s wet summer in Europe. Demand is also higher due to winter wind-damaged fences.
Meanwhile, a new timber export levy has been imposed by Vladimir Putin, the Russian president.
Industry analysts say tracking timber prices is difficult because the global forest products industry is fragmented and opaque. But they believe China is now second only to the US as an importer.
The trend has helped push the share prices of Swedish companies such as Bergs Timber and Roervik Timber to record levels, and global market leader Stora Enso recently reported a 183% increase in first-quarter operating profits.
