Trade in timber and timber

Russia occupies a unique geographical position. In the area of about 1690 million hectares of its territory is one fifth of all forests in the world and half the world's coniferous forests. The total area of forest fund and forest, not in it, is in the Russian Federation about 1178.6 million hectares. This is approximately 70% of the country.

Contracts that are in step with fashion
Domestic suppliers and consumers of primary forest and lumber on the numerous and independent. Therefore, the forest is potentially one of the main pretenders to the title of the first full-fledged stock exchange contract in Russia. Moreover, the global experience clearly indicates such a possibility. Surprisingly, for some reason it is very seldom mention the forest in this capacity. Even among experts on the American Forest Futures contracts are considered to be relatively unpopular tool. In fact, they are no worse than others: the forest contracts relatively high liquidity, adequate marzhevoe shoulder. And they are traded on a stock exchange, as the CME, which makes treating them with respect.

Currently, exchange trade on forest contracts occurs only in the United States. This is due to a number of reasons. The American market - the largest in the world. United States - the largest consumer of timber, but its own production can not meet domestic needs. The main importer for the United States supports a neighboring Canada. Long wood brought by water: fuse or carried by courts.

Therefore, the great American lakes - a very convenient place for trade in forest. Location Chicago unusually favorable trade terms. This - the railway and water transport hub, the first major city on the way from Canada to the United States, a center of exchange trade. This predetermined the emergence of forest exchange contracts in Chicago. The forest in the process of processing a number of intermediate products. These stats are considering some of the most important items that characterize the whole forest complex. This round, boards and other lumber, plywood, chipboard and hardboard panels, pulp and paper. There are varieties of soft and hard woods.

They maintained separate statistics. Soft wood - this is the usual pine, spruce, cedar and other, mostly conifers, trees. Hard woods are the valuable woods, it is used primarily for finishing work. This article does not address the pulp and paper industry, which stands alone in the wood.

Initially, the contracts traded only on the boards - as futures or options. Since 1996, the Exchange has introduced a number of commercial contracts for the DSP boards. However, they are still less liquidity. There is still contracted to the board determines the price of lumber for the entire sector. The basic parameters of forest contracts are given in Table 1.

Significantly, in the case of slabs CPD bid organizers went out of the way of the national «forest» Index, which would have imposed a contract and have the basis for the geographical United States, partly because of the high cost of transportation of lumber.

The possibility of the introduction of individual contracts for each exchange zone appears only if a sufficient number of participants recruited to ensure appropriate liquidity trades. Note that currently on a similar scenario in the U.S. introduced electricity contracts for individual regions. But in Germany there are also (but without the exchange) two zones of uniform tariffs for electricity. So it could be argued that forest contracts are in line with the latest fashion trends of the Exchange.

What determined the price of wood?
As with any commodity, the price of timber is determined by the ratio of supply and demand. However, unlike most agricultural products, are more important here than the offer and demand. The point is that forested land, and their main characteristics is inertia. Therefore, existing models can make predictions in the decades ahead with a reasonable degree of accuracy. In the forest there are no crop failures due to bad weather. Even large fires do not have a serious impact on prices, as relatively little impact on the volume of timber felling. It is not entirely correct to speak of a global sentence of the forest. As noted above, the timber is a classic commodity.

This is a commodity, which means cheaper goods, especially in terms of unit volume. The transport component of the value of the forest is great, which leads to a very uneven level of consumption in different regions of the world, while in countries with a large territory - even within different areas. In turn, this greatly diminishes the value of final tables of global supply and demand to assess the overall situation in comparison with other commodities.

For the most important stock market speculation the analysis of demand for lumber. To say that prices are subject to general economic conditions, the forest - did not say anything (Fig. 1). The main determinant of demand for the boards, is the general condition of the building industry, the main consumer. This consumption is more focused on the residential sector than in industrial facilities.

All traders are well known to those American statistics as Housing starts and Housing permit. With their help, you can not only assess the current state of the economy, but also to obtain projections for the near future. Indeed, if a family begins to build a new house or apartment, with high probability it will continue its intensive cost as soon as possible, stimulating the subsequent demand for the products of a number of sectors of the economy. For traders and analysts of the timber industry, these reports are just the Bible, because there is a very strong correlation between their performance and forecast the demand for lumber.