Boston, Massachusetts, USA, 18 April 2011 -- Alternative Asset Analysis (AAA), which advocates alternative investments, such as real estate, commodities, and sustainable forestry, has stated that it welcomes reports of increased Far East demand for U.S. forestry products.
The statement followed a report from one of the leading U.S. forestry management firms, F&W Forestry Services, claiming that some welcome relief was coming in the form of demand from the Far East.
The market for U.S. timber has been depressed for several years as a result of the housing slump. F&W's president, Marshall Thomas, said that the generally slow housing market in the United States does not show signs of any major improvements.
"Housing starts remain flat, although some prognosticators are predicting some growth this year but probably not enough to put upward pressure on (timber) stumpage prices," he said.
Despite this news, the domestic market for other wood products, such as paper and pulp is more steady and that demand for timber from the Far East could have a significantly positive impact on the U.S. forestry market going forward. This drive in demand "could have a positive impact on timber prices, both in the short and long term," Thomas said.
"This is news that forestry investors will be very happy to hear," explained AAA partner and fund management expert, Anthony Johnson. "Increased demand is likely to come from Japan, as it sets about the mammoth task of rebuilding whole regions after March's devastating earthquake and tsunami."
Thomas also explained that there is likely to be a rise in demand for wood products, including paper, in the near term because several large pulp mills were damaged in the disaster.
Even without the increased business resulting from Japan's earthquake, demand for U.S. lumber in China was increasingly rapidly, as was the demand for Canadian timber.
AAA advocates investment in forestry as a way to support ethical projects and sustainable initiatives, particularly in developing markets such as Brazil. Several organizations, including Greenwood Management, offer individuals and fund managers the chance to make investments in sustainable forest plantations in the South American country. "The plantations are going from strength to strength after a clampdown on deforestation of native forest by the Brazilian government," Johnson said.