Timber price rises mean money really does grow on trees

THE old adage says that money doesn’t grow on trees. Don’t believe it.

Increased demand for timber has sent the value of Scotland’s forests soaring, with average prices trebling in some woodland over the past decade.

Forests with a combined value of more than £21million are currently up for sale as owners are seeking to cash in on the booming market.

the price of timber has risen by 50 per cent in the past five years due to increased demand from biomass power stations and the construction industry.

this has sent the value of Scotland’s prime forests soaring, with average prices up 200 per cent in some areas.

One forest, Auchencairn and Ettrick near Dumfries, is currently for sale at offers over £10million.

Five others across the country are also on the market as Scotland’s £1.7billion-a-year timber industry booms.

the main driver of t he upsurge is new wood-burning – or biomass – power stations south of the Border, which has sent demand for timber rocketing. Demand from the sector has risen 300 per cent in the past decade and it now needs 1.25million tons of timber every year.

Stuart Goodall, chief executive of timber industry organisation Confor, said: ‘the sector is certainly very buoyant at the moment and appears to be for the next few years. timber is in extremely high demand, especially from renewable biomass power stations, but also from the construction industry.

‘It has taken some time to get over the effects of the recession but demand is growing all the time – even down to people buying wooden structures for their gardens. Decking, fences and garden sheds are all selling extremely well across the Uk now and that i s sending demand for timber up too.

‘Investors are now looking at forests as a safe way to generate money in the future as the cash returns are excellent, even over a decade.’

But while the sector is currently booming, Scotland is facing a chronic shortage of timber that could cost up to 1,000 jobs.

Falls in tree planting in the past decades mean the country could run out of timber within 40 years.

Planting has fallen sharply since 1990, when changes to development grants meant many private landowners stopped replanting trees.

Forestry Commission Scotland said that there are good levels of supply for the next 20 years.

But Confor said commercial trees can take 40 years to grow, leading to a major shortage and threatening up to 1,000 jobs. thousands of acres of sitka spruce – the backbone of the i ndustry – have been c hopped down a nd not replaced in recent years.

It is estimated that, between 2010 and 2013, 51,150 acres of productive forestry was harvested, with 15,800 acres chopped down in 2013, twice as much as in 2010 (7,900).

In the calendar years 2009-10 to 2012-13, 39,780 acres of conifers were planted, suggesting a deficit of 22 per cent.

there are fears Scotland’s ti mber i ndustry could be severely hit within 30 years if restocking rates of sitka spruce do not dramatically improve.

Mr Goodall said: ‘trees take about 35 to 40 years to grow and planting fell badly in the 1990s. We’re going to see the effect of that from about the 2030s onwards.

‘things are improving though, so hopefully the projected shortfalls are not as severe as we fear – but with demand so high at the moment, more trees do need to be planted.’

‘The returns are excellent’