Members will oversee the processes required to launch the new softwood Timber Market Index (TMI). Once launched, industry subscribers will enjoy access to enhanced data that will enable improved decision making.
Market indices offer a useful means of tracking industry prices and trends. They provide market participants with transparency and confidence, while supporting planning, growth and investment.
Various iterations of market indices have been used by the forest and wood products industry for many years to periodically review prices for growers and processors.
The forthcoming softwood TMI was established based on a recommendation made by the AFPA Timber Market Index Working Group (TMIWG), which was formed to consider opportunities for the improvement of the sector’s market indices.
The group proposed existing, widely used FWPA timber product sales and volume datasets could be used to form the basis of a new and improved indices for the Australian softwood industry.
FWPA has long worked with industry to facilitate the aggregation of individual company data that inputs into these datasets. The detail is collected monthly and made available via an online data portal. During the 2020/21 financial year, more than 80 organisations contributed data towards the production of 15 data series, including timber product sales and volume.
“The insights provided through an effective TMI can be used to inform contracts and help ensure all parties along the supply chain have a transparent mechanism to monitor price movements,” said Kevin Peachey, FWPA Statistics and Economics Manager.
The proposal for the development of a softwood TMI received broad support from industry stakeholders when the concept was introduced last year, resulting in the TMIWG and FWPA drafting a business plan relating to the new index.
The working group proceeded to secure the support of the 11 foundation members and is in active conversation with a potential two more. The foundation members will form an FWPA-led steering committee which, going forward, will take over TMI governance responsibilities from the TMIWG. Governance arrangements are expected to be finalised in the next month, with an official launch of the TMI following shortly after.
In addition, FWPA has engaged consultants to provide the application of the TMI methodology and oversee the Data Integrity and Audit process through a successful tender request process. FWPA is currently working to finalise contracts with the two successful parties.
The TMI is still accepting new members and interested industry members are invited to reach out to Kevin Peachey at kevin.peachey@fwpa.com.au for more information.
The steering committee is starting to review opportunities to establish market indices in the Australian hardwood sector and will engage with industry to initiate this process.
