Agrifrance Report 2019: Forests in France

HARDWOODS 

“Oak is priceless!” While the average price of oak continues to rise (trading at around €170 per cubic metre), the finest bundles now fetch more than €500 per cubic metre. In the second quarter of 2018, prices rose on the back of strong demand from the timber and cooperage markets. At public sales, prices increased by 25% and by more than 50% over two years. Numerous professionals in the sector describe this phenomenon as “unprecedented!”.

At the beginning of the spring, nearly 96% of the bundles found a buyer, whereas an additional 16,000 m3 of wood had been on sale. Will this strong demand for oak and buying pressure perhaps encourage professionals to turn to alternative species?

The price of beech is flat, but demand is solid. However, top bids do not exceed €75/m3. The average (roadside*) sale is around €60/m3, which makes ash good value in a more dynamic market. Demand has increased further since the beginning of 2018. Fetching on average €100 per m3 (roadside), the price for the finest logs were up 20% on 2017.

SOFTWOODS

With nearly 290,000 m3 brought to the market in the first half of 2018, douglas fir accounted for the bulk of softwood volumes harvested. In terms of price, wood less than 1 m3 barely changed in value (€35-48/m3), while wood exceeding 1 m3 rose by 7% (€60-65/m3). Very large timber no longer benefits from an additional purchase premium.

Common spruce, with 157,000 m3 placed on the market in the first half of 2018, ranked in second place. Despite a massive jump in volumes brought to the market (+70%), the common spruce market continued to expand although prices remained stable with significant disparities between regions.

The improvement, begun in the maritime pine market in 2017, continued with prices rising by 5% in the main production regions in 2018, particularly in Brittany. Price variations exist between the Aquitaine region (€46-50/m3) and other producer regions (€31-38/m3).

The economic slowdown and political tensions in the second half of 2018 certainly had an impact on the timber market at the end of 2018. 

THE FOREST MARKET

This apparent price stability masks the contrasting trends between regions and according to the quality of land placed on the market, with transactions fluctuating between €630 and €12,200 per hectare.

Forests over 100 hectares registered 150 transactions (0.8% of the total number of forest transactions) in 2017, including 80 for unbuilt forests (no buildings). They are usually valued in the upper bracket (€8,000 – €12,000 per hectare). This price increase is largely due to the higher value of forest soil, which may exceed €1,500 or even €2,000 per hectare. We assume there is a 20-30% premium on large forests. Over the past two decades their price has doubled.

Even though the surface area sold surged by 9.1% in 2017, the supply of forests over 100 hectares on the market is still as low (around 30% of land sold). It should be noted that the average surface area of forests over 100 hectares sold is 226 hectares.