The FIM Timber Index uses statistics published by the Forestry Commission (FC). It comprises an equal weighting of the Coniferous Standing Sales Price Index (CSSPI), being the average price of standing conifer timber sales, and the Softwood Sawlog Price Index (SSPI), being the average price of all softwood sawlogs sold on the FC estate.
The CSSPI includes all FC standing sales for all sizes of timber and all species. It will show most growth when demand for small roundwood is strongest, as the average tree size harvested is generally small in relation to highly productive Sitka spruce at the time of felling.
The SSPI includes all FC roadside sawlog sales. Felling of high yield class Sitka spruce will produce a high percentage of sawlogs in the product mix. Including the SSPI in the FIM Timber Index is thus representative of the crop being harvested from client's forests. It will show most growth when demand for sawlogs is strongest, and is thus a balance to the weighting of the CSSPI in the FIM Timber Index.
FIM is now experiencing increased competition and pricing in timber tenders due to imported timber becoming more expensive. FIM forecast a further increase in the FIM Timber Index in the six months to March 2017.
Asset values also continue to rise. The latest IPD UK Annual Forestry Index results for 2015 showed a total return of 10.8% per annum. The longer term 23-year annualised return has been 9.0%.