Why Teak?

It's pretty clear that people prize teak wood above your average length of pine or oak. But why is that, exactly? The answer lies in the natural oils and rubber found within teak. Here are some of the reasons we at Heaven Valley Belize choose to invest in growing teak.

1.              Teak can retain its oils and its rubber even after being felled and processed. Because of this, teak has greater naturally weather-resistant properties than just about any other type of wood. When dried to a proper moisture level -- around 10 percent of its original content -- the oils and rubber weatherproof the wood.

2.              The oils protect the wood from dry rot, which is a common problem in older wooden furniture.

3.              The oils and rubber protect the heart of the wood from invaders like fungi and parasites that can destroy other woods.

(From http://home.howstuffworks.com/home-decor/accessories/teak-wood-furniture1.htm)

4.         With all the concerns for the environmental impact on national forests, much of the tropical world has made it illegal to harvest from these areas.  This will make plantation-grown teak the only other alternative. 

 

5.         The price of teak does not fluctuate as much as the price of other commodities.  

 

6.         The teak market is a global commodity market and the price is set globally, determined by global demand.  The demand for teak from up-and-coming countries like India, China and Thailand is strong due to the need for qualified and durable building materials. Based on the historic records of the teak markets there definitely could be the potential of higher future prices.

 

7. Harvest time can be flexible based on the current market. Once the trees are maturing, cutting could start, but you do not have to harvest if the global markets are down.  After seven years the first thinning of the trees has to occur and after another three to five years, most of the thinning is done and you can let the trees mature.  The lumber from older trees has more quality and size, therefore the increase in price will be relatively faster than in the first ten years. The ultimate value in size and quality of teak will be at the end of 25 years' growth. 

 

8. Here are some gross production figures per acre in Belize based on a 25-year crop rotation with an expectation of 200 cu meters of teak per acre.  Calculating the above mentioned lower price of $1,200 per cu meter (not the $1,500) the gross production may result in $240,000 per acre of logs.  The net return could be $240,000 less 15% equals $204,000.  These figures do include the thinning of the trees at year 7 and year 14.  In this scenario the original $5,800 will exceed a 15% compounded interest return.

 

If you are thinking about a good way to pay for the education of your children or grandchildren, growing teak trees would be an excellent choice.

(Based on an article at http://teakfarmer.com/intrototeakproduction.html)