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Jon P. Caulfield Benedicte Gravrand, Opalesque Geneva:

During the recent 2015 Timberland Investment Conference - UGA, Sona Blessing interviewed two timber and timberland experts, a head of timberland research and the CEO of a timber trust company.

Timber an atypical commodity

Timber, even though a real asset, does not always behave like a real asset because timber markets tend to be very local in nature – whereas other traditional commodity assets are much broader, they trade on centralized exchanges and have specific contracts, Jon P. Caulfield, head of Timberland Research at BTG Pactual's Timberland Merchant Banking business, said in an Opalesque Radio interview. There are hundreds of sawmills in the South of the U.S., for example, but they do not trade on exchanges.

With traditional commodities, he continues, what you see is what you get. But with a tree, if it is 10-year old, it will be cultivated for pulpwood (for paper production), and a 20 or 30-year old tree will become marketable not just for pulpwood but also for small and large sawtimber (trees suitable for sawing into planks, boards, etc.). Those different products have low correlation to one another.

Timber price volatility, compared to traditional commodities, tends to be lower.......................

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