CLT is manufactured from boards of quick-growing timber species, which are then stacked on a right angle and glued in layers of three, five or seven over their entire surface.

This makes for a very reliable and strong material that is commonly used throughout Europe in the construction of homes, as they are easily slotted into place in situ.

One of the latest fans of CLT is the Borough of Hackney in London, which is using the material in the construction of high-rise buildings. The deputy mayor of Hackney, Karen Alcock, said, “Using CLT enabled the buildings’ carbon footprint to be reduced. The quicker construction time [12 weeks] over traditional methods was important because the HCA imposed time constraints as part of its funding provision.”

The popularity of CLT could also be great news for those invested in quick-growing timber species as demand means higher prices and greater returns on investment.

There are many ways in which investors can now put their cash into sustainable and fast-growing timber plantations, like through Greenwood Management’s schemes in Brazil and Canada.

On June 8^th Brazil announced that its first quarter GDP for 2010 had grown by 9%. This was greater than the 4.5% which most analysts expected. This is more growth than the country has seen in over two decades!

Unlike the world’s top economy, the US, Brazil’s manufacturing sector and its exports to China are growing. This has had a partially negative effect in the inflation department as the inflation rate reached 5.2%, which is higher than the government target of 4.5%.  However to prevent the economy from overheating Brazil’s central bank raised interest rates to 10.25%.

There is still a fear that the US could go into another contraction and the weak growth in Europe isn’t encouraging for most people looking to invest in Brazilian stocks. The United States is Brazil’s main importer of soy beans, coffee and iron ore and a fall in purchases from the US could slow down Brazilian growth. Despite this Brazil has been expanding their horizons with China and India becoming consistent trading partners.

In July Brazil added 181,000 jobs, which brought the total to 1.7 million jobs in the last seven months alone! That’s a lot of jobs if the fact that Brazil has a population of 190 million people is taken into account.

Clearly now is a great time for an investor to looking into buying Brazilian stocks.

Forestry Update is sponsored by Greenwood Management. For more information on investing in Brazil please click here.

“It has a growing population, it’s energy self-sufficient, it’s food self-sufficient,” said Zell, chairman of Equity International, about Brazil, the largest of the South American countries. “It’s growing and, at least for now, they’ve solved the problem of inflation.”

Born and bred in Chicago, Zell made his first fortune buying and selling real estate from distressed owners and ranks 237 on this year’s Forbes list of billionaires. Zell has also acknowledged that at least half of his company’s investments are in Brazil.

Even though elections are coming up in October where the Brazilians will elect a new leader, both of the main candidates have pledged to continue the policies of the current president, Luiz Inácio Lula da Silva.

Compared to the US, which has a 70%, debt of GDP, Brazil only has an 8% debt and the nation has a AAA rating from several major credit rating institutions. Adding to Brazil’s status as an emerging world power are its successful bids to host both the 2014 World Cup and the 2016 Olympic Games.

Forestry Update is sponsored by Greenwood Management. For more information on investing in Brazil please click here.

“Brazil’s economy is extremely steel-intensive and as this economy continues to grow, countries that now count on steel exports from Brazil will have to source materials elsewhere. This will have an impact on the global supply of steel and will cause prices to increase rapidly”, said Spoores.

Spoores was also part of the ‘Demand Drivers – What steel consumers are looking for’ panel that included the executive director of global ferrous products at JP Morgan, Jeffery Kabel, the deputy general manager of Sino steel Futures in China, Dongwei Chen and the principal consultant of the CRU Steel Business Unit in the UK, Chris Houlden. The Latin and American Iron and Steel Trends conference was organized by the CRU Group.

During his speech Spoores urged government officials and the Brazilian steel industry to work together to create a certification program for Brazilian pig iron, which will remove global concerns regarding questionable labour practices and environmental issues over the sources of charcoal. Charcoal of course being one of the key ingredients in the manufacture of pig iron, which is a main component in the production of steel.

Another aspect that is expected to impact the steel pricing is a shift in how iron ore is priced. In the past iron ore had been contracted for annually and only recently has the market shifted to quarterly pricing.

“Even with the change to quarterly contracting for iron ore, the current pricing structure lags the market,” Spoores said. “Iron ore will likely shift to monthly contracts based on spot prices, much like mills execute for natural gas or zinc. This new structure will bring greater volatility to steel prices and both mills and customers need to be prepared for this new reality.”

Forestry Update is sponsored by Greenwood Management. For more information on investing in Brazil please click here.

While these efforts have yielded some positive results, vast expanses of forest disappear each year, even the legal logging companies get in on the act by bribing officials to allow them to over cut and under report their activities. This is one area in particular which experts feel should be examined more closely.

It wasn’t until two years ago that the US passed the Lacey Act, which makes it illegal for anyone to import illegally harvested timber into the US. Up till then there was no international oversight in the area of logging, this led to a culture of corruption, over-exploitation and illegal mining. Europe is following their lead by exerting pressure to develop bilateral agreements with timber producing countries that require third party oversight of the logging process. This was particularly effective in Cameroon, leading to a significant reduction in deforestation rates.

Brazil on the other hand has been trying a different approach by discouraging the sale of commodities such as beef, soybeans and sugar from ranches and farms built on deforested land. The improvement in technology has assisted this approach by allowing the perimeters of farms and ranches to be recording using satellite imagery. This tracking system is accessible to the general public such as companies and civil groups. Each time a farmer or rancher is found to be encroaching on forested land that is audited and results in a hefty fine.

The approach appears to be working as Brazil has announced that an estimated 2,700 square miles of Amazonian forest was cleared in the year ending July 2009 that is down 46% over the previous year. This was the lowest rate since the government started monitoring deforestation in 1988.

So going by these figures let us hope that conservation is finally coming out ahead of deforestation.

Forestry Update is sponsored by Greenwood Management. For more information on investing in Forestry please clickhere.

“Timber is safer than stocks but not quite as safe as Treasury inflation-protected bonds,” he said. “And as long as the sun shines and the rain rains, trees grow.”

Timber also acts as an inflation hedge.

“If you look at commodities, you find a pattern that all of them, except timber, had a declining real price up until 10 years ago,” Grantham said. “But standing timber has a long-term record of modestly rising prices.”

Forestry Update is sponsored by Greenwood Management. For more information on investing in Forestry please click here.

The credit for this must go to the BASIC bloc, Brazil, South Africa, Indonesia and China. These rapidly developing countries had already implemented plans to reduce their emissions and had them internationally monitored and verified. What I have found is often overlooked is the fact that this is the first time in the history of international cooperation on climate change that there is a voluntary partnership between North and South with backing from emission targets and intentions. In total over 100 countries associated themselves with the Copenhagen Accord, which is more than any other agreement has done since the Kyoto Protocol.

In my humble opinion the silver lining that came out of talks in Copenhagen was the REDD plus scheme, which focused on reducing the 20% of global greenhouse gas emissions that are linked to deforestation. By paying developing nations to conserve rather than chop down their forests would curb these emissions and provide important benefits to local and national economies.

For instance in the case of Indonesia, if they halved their current rate of deforestation they could potentially earn up to $1 billion per annum and that is if prices for carbon stay relatively low. More income could be generated if the efforts to curb emissions drive the price of carbon higher. In advance of an international agreement on climate change investment in renewable energies and forestry can help support the carbon markets.

Of course developing countries such as Brazil and Indonesia aren’t just driving down emissions for the environment; their motives are of a much more financial bent. The pledge of $30 billion from developed nations would be ploughed into investments on the ground.

However, the concern among many developing countries is that the industrialised nations aren’t providing new money but instead are repackaging old pledges and/or funds diverted from other existing budgets.

And some countries are not prepared to wait for a new ‘Kyoto Protocol’. Instead roughly 30 developing countries are already requesting UNEP’s help in transforming their economies and development strategies to a green economy. For many of these countries this move not only makes social and environmental sense but economic sense as well.

In China for instance over 30% of their stimulus package is being spent on high-speed rail, renewables and energy efficiency projects.

The challenge for world leaders at the climate talks in Cancun later this year is to recognise that only through a fair and equitable global agreement can climate change be addressed by all 193 countries.

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According to the federation big reductions in production are due to plant closures and reduced work times, which have more than offset the downturn in domestic construction. Last year sawn timber production was down 19% forcing lumber buyers to compete to secure supply as mills stocks were down a third from normal levels as a result.

“Prices in both the domestic and export markets are now rising steadily with a number of price increases in the range of 5% to 10% already announced for the domestic market in February and March.”

“Although export prices and margins have been squeezed by the exchange rate, export volumes have actually lifted by about 10 per cent as firms have chased cash to ease liquidity pressures.”

The federation has said that lifting production would be difficult in view of the fact that there are log shortages and tough economic conditions in the first half of this year are expected.

The shortages for the domestic market have been compounded by a massive surge in log exports, primarily to China. In the June quarter China took an extra one million cubic metres of logs and accounted for an entire one third increase in exports the year before.

“There is now a huge reliance on and vulnerability to, China as a result of the biggest and fastest restructuring of our forestry trade in its entire statistical history,” the federation says.

A little over two years ago 14% of New Zealand logs were exported to China. Since then that has grown to 60% and also during that time the lumber exports to China has almost doubled to 28%, which is nearly three times the amount sent to the their neighbours and next biggest market, Australia.

Asia now accounts for 80% of all log exports when as little as six years ago it was a little over half that amount. Although according to the federation the average price paid by Asian buyers is roughly a third of that paid by Australia.

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Lula and Chavez met ahead of the summit of the Union of South American Nations (UNASUR), which is to take place in Buenos Aires, to discuss various energy related projects and to seek common ground.

Tensions between the two countries have dissolved since Venezuela’s admission to the Mercosur South American trade bloc and this is the first meeting between the two since the Brazilian Senate ratified Venezuela’s admission.

It should be noted that the trade between Brazil and Venezuela amounts to $4.2 billion per annum, with a surplus of $3 billion in Brazil’s favour.

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“This is the start of a revolution in this region,” Lula said in a speech in Tome-Açu, a town in the northern state of Para.

The President has hit back at critics who are against plans to build palm oil processing plants by saying that they will generate wealth in one of the country’s poorest regions and reduce environmental pollution. The plans are backed by the state controlled energy company Petrobras and the federal government and will provide incentives for the cultivation of palm oil for the production of biofuels.

Under the current plans the scheme would encompass two different projects and would come to a total investment of $702 million (1.3 billion reais). The first project would involve producing 120,000 tonnes of palm oil based biofuel annually to supply the northern region of Brazil. The second project would include a partnership with Galp, a Portuguese energy firm, to export a portion of that fuel to Europe.

Despite being the world’s leading palm oil producer, Brazil still imports almost half of the oil it consumes. Lula believes that the projects would end the state’s dependence on the timber market, which is considered the main cause of Amazon deforestation. He hailed palm oil plantations as environmentally friendly and stated that only areas that were deforested would be used.

The project is expected to generate 7,000 direct jobs and 15,000 indirect jobs and the Brazilian government predicts that up to 2,000 Para farmers would benefit from the project. The entire region would also benefit from the improvements to the roads and bridges, which would be involved in a project of this size.

The controversial Belo Monte hydroelectric dam, which when completed would be the worlds third largest was also defended by the President.
“People have to understand, that the vast majority of people in Para are in favour of the dam.” Lula said.

The dam project has sparked international protests by environmentalists, indigenous communities and members of grassroots groups as it will flood almost 200 square miles of jungle and displace an estimated 50,000 people.

Forestry Update is sponsored by Greenwood Management. For more information on investing in Forestry please click here