Why are buyers worldwide seeking tropical hardwood investments?
With the recent crash in the international real estate and stock markets, investors worldwide are looking for a safe and profitable investment that will provide significant returns in both the long and short term. Investment in tropical hardwood plantations is the answer. Here are three basic facts to help understand why a zoned building plot with harvestable teak is one of the safest and most profitable investments of yesterday, today, and tomorrow:
1) The supply of teak is diminishing
Every available statistic, organization, and daily headlines tell us that the world’s tropical rainforests are being rapidly destroyed for forestry as well as other reasons. Teak, in particular, is getting much more difficult to source. Myanmar (formerly Burma) is one of the world’s largest teak exporters – however, the United States Senate recently passed an act which forbids all timber imports from Myanmar, which further reduces the availability of teak to the markets which desire it most.
As estimated by the Food and Agriculture Organisation (FAO), each year approximately 13 million hectares of the forests worldwide are lost due to deforestation. The net forest loss from 2000 to 2005 alone was 125 square miles per day.
2) The demand for teak is growing
During the last four decades, world consumption of tropical hardwoods multiplied nearly 25 times to more than 100 billion board feet per year.
Due to the global environment crisis, the demand for plantation-grown teak has increased accordingly. Teak plantations have been successfully established for at least a century, but currently, less than 1% of the worldwide demand for tropical hardwoods can be met by sustainable plantation forestry. With more and more countries clamping down on illegal logging in the rainforests for highly desirable teak, the vast majority still comes from the natural rainforests. This means the availability of teak is in rapid decline, driving prices skyward.
3) The cost of teak is rising
The UN Food and Agriculture Organization states “World consumption of industrial wood is predicted to rise 60% over the next 5 years.”
Boasting healthy and regular returns over a short and long term period, teak and other hardwood plantation investment is simply the safest and best way to invest and diversify your portfolio.
For more information on tropical hardwood investments, please visit our Why Tropical Hardwood page.
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