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 clients' 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.
The FIM Timber Index showed strong growth, increasing 25.6% over the year to March 2018, and 16.9% over the six month period to March 2018.
These changes are yet to be reflected in asset values, which also continue to rise. The latest IPD UK Annual Forestry Index results for the year ending 31 December 2017 showed a total return of 13.9% per annum. The longer term 25-year annualised return has been 9.2%.