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| Home | Jarrah - Investing In your Future | Rough Sawn Kiln Dried Products | Flooring | ||
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If the price of Jarrah timber increases by 50% over the 3 years, as has been suggested by industry suppliers
and users alike, then the price of rough sawn dried Jarrah will be around $4600 per m3. This represents an
annual compound growth of approximately 13.5% over that period.
Building material costs have risen steadily in Australia over the past few years, as they have in major export markets like the USA. These costs should continue to rise. Given the scarcity of Jarrah supply, it is likely that rises in the value of Jarrah should exceed the building materials average. Moreover there is global price pressure on all hardwoods due to increased demand, diminishing supplies and the slow rate at which replacement plantations can be established and ultimately harvested. Jarrah is restricted in its natural distribution as explained everywhere else, making it an already rare fine timber, and is further and more importantly restricted by new Government regulations making a rare timber even more difficult to source. As already pointed out it is not possible to predict the likely returns at the end of the 3 year drying period, it is however possible to review recent sales figures. We indicated elsewhere in the memorandum prices are likely to be under upward pressure and indeed they are already on the rise, with some sales by “JS” already as high as $3697. Wholesale prices have been significantly raised by most of the remaining Mills and product availability is decreasing while demand remains high. Many industry participants are predicting a continued tightening of supply and further increases in prices. |
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