PRICING OF TEAK

Prior to harvesting, it will be necessary to decide whether to sell the raw material in log form to local and export markets, or to process it for added value in a sawmill For the moment, processing capacities seem to be higher than raw material supply potential.

During the plantation establishment period, and before thinning is begun on a larger scale, the economic value of plantations can only be evaluated by estimating the accrued commercial value of trees in the growing process.

Our MAI is estimated at a conservative 12 m3 per hectare based on experiences in other locations and in Costa Rica. On some sites an annual growth rate of 20 m3 per hectare or higher has been observed (Camacho, 1998; de Camino, Alfaro and Sage, 1998; Herrera, 1998).

Prices of teak very considerably depending on wood quality and whether you are dealing with plantation grown wood or old growth teak which is very expensive at this point. Our estimates are based on actual market prices of plantation teak(US$350 to $650 per cubic meter free on board [FOB] depending on diameter and wood quality)and are based on recent regional experiences.