Thursday, August 21, 2008

How are teak logs measured?

If you look at the various websites providing pricing information on teak logs you will discover various references to prices per cubic meter and prices per hoppus ton.

The hoppus ton is the older British system of measurement whilst the cubic meter is the newer metric system.

You can see a full explanation of the hoppus ton measurement system here and the conversion rate is as follows:

1 Hoppus Ton = 1.2727 CBT (Cubic Ton) = 1.802 Cu-Meter (CBM)

Some other common abreviations you may come across are:

FOB - Free On Board. A shipping term which indicates that the supplier pays the shipping costs (and usually also the insurance costs) from the point of harvesting to a specified destination normally the port from which the logs are shipped, at which point the buyer takes responsibility.

CIF - Term of sale signifying that the price invoiced or quoted by a seller includes insurance and all other charges up to the named port of destination.

CIP - Carriage and insurance paid to (CIP) terms include insurance and all charges up to a named place in the country of destination (usually the buyer's warehouse).

There is no current internationally accepted teak grading system with different teak log grading systems operating in different jurisdictions. Teak 21 was set up to advise on and try to put in a place a globally acceptable teak log grading system.

So armed with that information why not check out global teak prices and if you are wondering why teak prices have been increasing the answer is twofold:

1. Reduced supply, currently less than 5% of the world's teak comes from plantation sources with the balance cominng from Natural Jungle. Of course world opinion has rightly moved against the logging of our natural rain forests leading to reduced supply

2. Increased demand: demand for teak worldwide is increasing driven largely by huge demand from India and China.

In any market where supply reduces and demand increases this results in increased prices.

If you would like to see how you can invest in a booming property market with the security of teak on your land, have a look at our website

No comments:

Post a Comment