White Gum Market Demand

Stocks of Australian plantation hardwoods have increased five - fold over the last 10 years in response to higher demand and an increase in price of over 50%.

Demand for hardwood timber in Japan alone has increased over 300% during the same period. With competing suppliers such as the US scaling exports back to almost nil Australian hardwoods such as Dunn’s White Gum are filling increasing demand for timber, particularly in fast developing regions such as Asia where Australia enjoys significant competitive advantages compared to other suppliers.

Malaysia and Indonesia are expected to reduce their harvests by 50 million cubic meters per year (5 times the current Australian yearly hardwood production) by 2020 to preserve their existing forests, Australia is seen as one of only a handful of Pacific rim countries with the ability to increase their sustainable harvest to fill an expected 200 million cubic meter yearly shortfall in hardwood supply by 2020.

Even in Australia’s domestic market hardwood demand for firewood, one of the lowest value hardwood uses, is around 7 million tonnes per year at around US$ 105 per tonne in 2001.

According to the Australian National University Forestry Department, prices have steadily risen “between 55-75% over the last 10 years and are expected to rise even faster in future”. Prices for wood chips are US$ 150 per tonne with quality products such as saw logs achieving significantly higher prices.

The Food and Agriculture Organization of the United Nations forecasts world demand for timber products to increase 60% over the next 25 years. Touchwood’s plantation grown hardwood will help to meet future timber demand and protect existing forests.

Sources: ANU: Australian National University Forestry Department, ABARE: Australian Bureau of Agricultural and Resource Economics, Australian Agribusiness Group, FAO: Food and Agriculture Organization of the United Nations