Factors related to forest price fluctuation

Knowing that the value of the forest is related not only to the quality of the latter, but also to external factors that determine price fluctuations, it may be that today is the best day when it is financially most profitable to sell the forest. It’s always worth looking into as a professional purchase of forests can help you achieve the highest return in your case.

External factors determining the fluctuation of the forest price

The price that was offered for the existing forest, for example, a year ago, can be completely different today – both lower and higher. It is possible to distinguish a whole series of external factors that determine the fluctuation of the forest price.

Supply and demand. As with many other types of goods, the fluctuation of the price of timber is directly related to supply and demand. If there is an increase in demand from the construction sector, wood producers or other industrial sectors, naturally, this can also lead to an increase in forest prices. And, on the contrary, when there is an excess supply of wood in the market or a decrease in demand, the prices of forest also fall.

Economic factors. The economic situation, such as the interest rate, inflation and other macroeconomic indicators are also directly related to the price of forest. As the economy grows, there may be an increased demand for wood from construction, industry or other sectors. And the economic recession, on the contrary, reduces the demand, and thus the price of forest purchase.

Legal aspects. Legislation regulating forest exploitation, timber trade, environmental protection and other issues also affect the fluctuation of forest prices.

Climatic conditions and natural factors. Various natural disasters such as fires, hurricanes, especially in regions where the timber industry is concentrated, also play an important role in the price of forest.

Forest quality is an indicator inseparable from the price of the forest

Of course, not only external factors are discussed, but also the quality of the forest – a factor directly related to the price of the forest, the offer of which can be heard when deciding to sell your property. And the term “forest quality” also includes several factors that should be familiarized with.

Forest composition. This is one of the most important indicators defining the quality of the forest. The price depends on whether we are talking about a mixed forest, or maybe an oak forest or a conifer forest.

The age of the forest, or more precisely, the maturity of the trees – a criterion that is also taken into account when determining the price of the forest for sale. It takes a long time for young trees to mature and become suitable for felling. For this reason, the price of immature forest is usually lower than that of mature trees.

Geographical location. This is another criterion inseparable from the price of the forest. If the forest is located in a place that is more difficult to reach, naturally, its price will also be lower.

When assessing the potential value of a forest, it is important to take into account the restrictions on the frequency of felling applied to forest felling in a particular case.

Thus, the value of the forest is related not only to the quality of the latter, but also to external factors that determine the price fluctuation. Forest owners should be constantly interested in market trends and forest price changes. When the price offered for a hectare of forest for sale is obviously increased, instead of blindly clinging to ownership, it is rational to consider the possibility of selling the forest. Only with this approach can the available forest bring its potential maximum financial benefits.