An approach to forest product price series analysis in Catalonia: The example of the Scots pine trend

Abstract

Timber price is one of the most important variables affecting the economic feasibility of forest management. Observed market prices reflect present and past conditions of supply and demand for products. When deciding on how to estimate prices that could occur sometime in the future, we should consider two factors: the expected inflation and the price change.

This paper discusses a simple method to calculate the trend line by means of the real price change rate, estimated by an econometric model based on the linearization of the compounding approach. This method is recommended for less skilled IT and statistics users, provided that an acceptable price time series is available. Although it may be used to predict prices in the medium term, in the end it will be the market conditions prevailing at the time that will drive decision-making on the sale of forest products.

After having calculated the real price change rate of the last forty years, it is evident that in Catalonia the vast majority of forest products show a downward trend, despite the increase registered recently, especially for timber.