Global Carbon Markets, Prices, and Linkages to the Forestry Sector

22nd September 2021

The carbon markets can be split into two categories: the compliance markets and the Voluntary Carbon Markets (VCM). Compliance markets were initially started under the UNFCCC Kyoto Protocol (2005-2020) which introduced three market-based mechanisms: Emission Trading (ET), Clean Development Mechanism (CDM), and Joint Implementation (JI). The 2015 Paris agreement, ratified in 2016 brought more tools to the markets such as green financing and trading in green bonds. In addition to these systems, a significant number of countries have implemented a carbon tax.

Investment in African Forests – The Importance of Value Chain Information

9th September 2021

There is currently renewed interest amongst investors in forestry projects in Africa.  Several existing forestry enterprises such as KOMAZA in Kenya have succeeded in raising new capital investments in 2020, while development finance institutions and other investment funds are looking for new investment opportunities.  Carbon projects and timber processing seem particularly attractive.  

Tighter Global Lumber Markets

9th August 2021

Anyone who recently bought sawn lumber will know that prices are high this year. This is felt globally, but nowhere more than in North America where average prices for 2021 are more than twice their long-run average levels (Figure 1), although US prices have come back down in June and July. Prices are also high in New Zealand, due to elevated sawlog export prices, and strong demand for lumber for everything from fruit pallets to house framing. While this is welcomed by forest owners and sawmills, it is driving costs in construction and packaging, leaving many producers and buyers globally to wonder when lumber prices will return to normal.

Australian Harvest & Haul Cost Index – June 2021

10th June 2021

Margules Groome’s quarterly harvest and haulage cost index for Australian plantation operations is based on actual price indexation mechanisms used by industry weighted by volume harvested. The previous index published in June 2020 showed a massive fall in fuel prices, some 29%, due to the impact of the COVID-19 pandemic control measures on fuel demand.

Australian Softwood Residual Log Price Index – June 2021

10th June 2021

Margules Groome’s Australian Softwood Residual Log Price Index measures domestic softwood plantation residual log prices (excluding exports). The index is a measure of the residual log value to the forest owner once harvest and haulage costs are subtracted from mill door log prices. It is a measure of the forest owners log margins or the spread between log prices and logistics (delivery) costs.