FWPA’s datasets — the future of Australia’s Timber Market Index
A new approach to the sector’s market indices could result in the establishment of a high-quality, best practice approach to informing the decision making of industry subscribers.
The proposed new Timber Market Index (TMI), which has been broadly supported by industry stakeholders, would be underpinned by the existing, widely used FWPA timber product sales and volume datasets.
Market indices offer a useful means of tracking industry prices and trends. They provide market participants with transparency and confidence, while supporting planning, growth and investment.
Various iterations of market indices have been used by the forest and wood products industry for many years to periodically review prices for growers and processers.
“The insights provided through an effective TMI can be used to inform contracts and help ensure all parties along the supply chain have a transparent mechanism to monitor price movements,” said Kevin Peachey, FWPA Statistics and Economics Manager.
In 2017, a collection of industry stakeholders came together under the auspices of the Australian Forest Products Association (AFPA) to establish the AFPA Timber Market Index Working Group (TMIWG).
The remit of the TMIWG was to consider and review opportunities for the improvement of the sector’s market indices, with FWPA taking an observer role. The group set out to explore best practices in market indices, data collection and analysis, and index methodologies.
As part of this work, the group commissioned the development of a report which considered opportunities to review Australia’s timber market indices. The report proposed the existing FWPA timber product sales and volume datasets could form the basis of proposed new indices for the Australian hardwood and softwood industry.
FWPA works with industry to facilitate aggregation of individual company data. The detail is collected monthly and made available via an online data portal. During the 2020/21 financial year, more than 80 organisations contributed data towards the production of 15 data series, including timber product sales and volume.
Earlier this year, the TMIWG presented the report and coordinated a survey of relevant AFPA members to gauge the level of support for trialling, testing and ultimately adopting the proposed new TMI. The vast majority of respondents supported this approach.
Based on the response to the survey, the TMIWG and FWPA have drafted a business plan, including the associated governance arrangements for the new TMI. This includes plans to assemble a minimum of 10 TMI foundation members to form an FWPA-led steering committee which, going forward, will take over TMI governance responsibilities from the AFPA TMIWG.
TMIWG Chair Keith Lamb has written to relevant AFPA members to gauge their interest in becoming a steering committee foundation member. In addition, FWPA is reaching out to key industry contributors to also ascertain their interest in participating.