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Alternative Market Briefing

Timber offers future inflation hedge and is currently driven by China demand - Opalesque Radio

Monday, February 21, 2011

amb
Doug St. John
From Kirsten Bischoff, Opalesque New York:

Timber/natural resources just earned Mass Prim +14.29% in 2010 (Source). The timber markets are currently being driven by Asia housing demands that have driven US log and lumber exports to China +150% in 2010 (over prices in 2009, Source).

In addition to the US market gains from this demand New Zealand exports into China have also risen by 20% this year, Doug St. John, Director of Client Services with Green Crow Management Services told Sona Blessing during a recent Opalesque Radio interview. Green Crow is a US-based provider of timberland services to institutional and high net worth investors and St. John also says that even though US housing starts remain low, his firm has expectations that simple population growth (at 1% a year) will see a long-term growth in US timber needs as well.

But in the near term, one of timber's benefits is also its use as a hedge against inflation. "It has been well recognized as an advantage as a real asset characteristic, that the value of timber has typically gone up with inflation. I refer to it as inflation resistant," says St. John. "That way y......................

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