What is the investment appeal for tropical trees?

Tropical trees and hardwoods have outperformed the stock markets since before the 1940’s. Can you say the same thing for your portfolio? All you have to do is go to a lumber yard that deals in tropical hardwoods and check out the board foot prices to realize that this is a commodity like no other. Even on sale or with a special discount most hardwoods are almost unaffordable. What are the economic factors that make tropical trees so valuable? Simply put, the answer can be broken down into three main points:

1. Every year there are more and more people on our planet eager to consume wood products for: construction, furniture, pulp and paper and fuel, to name just a few wood uses.
2. Every year there are fewer and fewer natural forests accessible to loggers, making demand exceed supply in many instances.
3. Tree plantations and wood lots have to compete with urban areas and agricultural uses for available land, restricting the number of plantations that grow hardwood trees.

Tropical trees have appeal around the planet. Potential markets are not restricted to just one or two regions, but rather extend to every continent on the planet. Even when the economy in North America is in recession, China and India are buying. Many regions have virtually no or scarce lumber resources, such as North Africa and the Middle East, India, Pakistan and China. Some regions have few hardwood resources that can be grown in economically feasible time periods, being instead limited to softwoods, such as most of Europe, Russia, Canada and much of the United States. Visit Amazonia Reforestation for more information at http://www.myreforestation.com/.

Setting up a Natural Reserve and Wildlife Refuge

I have spent the last few days preparing a detailed submission to potential funding sources for the establishment of a 10 square kilometer natural reserve along the banks of the Rio el Bita in Vichada, Colombia. The area we have selected has two old growth inundation forests, 5 km of river bank, 2 quebradas entering the river (flood channels) and a unique river inlet for which we have big plans. Registering the natural reserve under Colombian law and putting in the infrastructure will take a year. The second year will see us open to the public, hopefully with University of Alberta researchers using it as a base for two studies they would like to do, and with local Colombian botanists and zoologist helping us to create an eco-tourism marvel.

I mentioned the unique river inlet. The plan there is to construct an aquatic turtle hatchery. We would collect turtle eggs from up and down the Rio el Bita before poachers can get to them, hatch them at our facility, and then release them into the river inlet. This process should insure a higher than normal survival rate for these endangered creatures. There are 3 varieties of aquatic turtle in Vichada, all of which can get very large when they are not being hunted. I can hardly wait to get started. There are of course quite a few other aquatic species that will have some protection thanks to the natural reserve, including pink dolphins, giant otters, yellow-bellied caimans, giant anacondas, manatees, sting rays and more.

The project includes the planting of 2 square kilometers of native tree species for expanded wildlife habitat, the construction of an interpretive center for eco-tourists, and viewing platforms for researchers, artists and tourists wishing to experience the magic of the inundation forest. I am hoping that we will be able to have a budget for volunteers to stay at the reserve and assist with studies and other activities designed to educate the locals about the benefits of preserving the environment. I am planning on including a page regarding this project in our CO2 Tropical Trees web site, which will be re-launched with a major overhaul soon.

Ploughing to Plant Tropical Trees

One of the reasons why investing in tropical trees is low risk is because well managed plantations are in the business to make money themselves. They can't afford to be sloppy. A good example is how they prepare the ground for planting. Because tropical trees sink deep roots, the ground needs to be ploughed to a depth of 60 or 70 cm (2 feet). This loosens the soil so that the seedlings can set root quickly. In order to keep the soil soft so that each seedling has a good start, plantation crews add lime (cal in Spanish) to the freshly ploughed field. They also add boron (boro in Spanish), which provides the trees with an essential element that prevents leaf rust and some other potential problems.

Last but not least, fertilizer is added to the soil. The trees themselves fix nitrogen in the soil as they grow. 100 hectares of land or 250 acres require approximately 32 metric tons of lime, 6 to 8 metric tons of boron, and 12 to 16 metric tons of fertilizer. It takes 1 to 2 weeks to plough 100 hectares, depending on soil conditions and rock. Plough blades often go dull and need to be replaced. And then of course there is the constant maintenance required on the tractor, with oil, filter and fluid changes and lube every 50 and 100 hours, based on manufacturers specifications. The tractor Amazonia Reforestation uses is a 105 HP Kubota.

The Inundation Forest

Perhaps one of the most exciting aspects of afforestation and reforestation in the Orinoco plains of eastern Colombia is the inundation forest. Just like it sounds the forest is flooded. But this is no ordinary flood, instead it happens every year for as much as 3 months at a time during the height of the rainy season, from June through to August and maybe even September. All the rivers rise above their banks as torrential tropical rains occur. Only the tree tops remain above the waters, which in many instances are as much as 15 feet or 5 meters deep. The effect is absolutely magical, as access to the rainforest is only possible by boat and canoe.

These conditions have caused the tropical trees of the inundation forest to evolve to be flood resistant. Their roots go deep and straight into the ground, so that the trees are not affected by the massive flood waters all around them. Once the flood waters recede the jungle returns to normal, though tell tale signs remain. Certain fungi and some types of lychen mark the high water points on the trees. Species include Caraipa llanorum commonly known as Saladillo, Acosmium nitens commonly known as Congrio, Ocotea cymbarum commonly known as Sassafras, Aceita maria commonly known as Aceita, and numerous others.

Needless to say the trees that live through the inundation cycle provide some exotic, strong and colorful hardwood. One of the toughest customers is the Congrio, the lumber of which is so dense that even left untreated it remains sturdy for 30 years or more, and is more than a match for ants and termites. Amazonia Reforestation is actively working with the Omacha Foundation to preserve many of these native tree species. Considerable effort is going into determining the best way to commercialize some of these species in a plantation setting. During the wet season is one of the best times to see wildlife, because many creatures leave the inundation forest for the drier plains. But others move in to feed, like pink dolphins, manatees, sting rays, giant otters and anacondas, to name a few.

Endangered Wildlife and Reforestation

One of the important aspects of tropical tree reforestation and afforestation activities is expanded habitat for endangered wildlife. However, there a couple of caveats that must be considered. As discussed in yesterday's blog mono-culture plantations do very little for wildlife, because most creatures are niche dependent. This means that a good reforestation and afforestation project should be based on a multi-species approach. It should include the planting of native tree species (trees that are local) and fruit trees, so that the new habitat can provide food as well as shelter. This is the methodology employed by Amazonia Reforestation and their afforestation program in Vichada, Colombia.

The other caveat is that the tropical tree plantation must harvest in stages, so that the wildlife is not faced with a clear cut. This is best achieved in multi-species plantations, because the trees mature at different times and can therefore be selectively logged at different times. This approach allows the plantation to plant replacement trees in the areas that have been selectively harvested, so that the forest is maintained. Since the fruit trees would rarely be cut, they will start to form anchor points with in the new forest that wildlife can depend upon. This type of reforestation and afforestation benefits a variety of creatures, such as (1) monkeys, jaguars, ocelots, possums, sloths and other mammals, (2) birds like parrots, macaws and parakeets, who all depend on fruit and native nut trees for their survival, (3) reptiles like iguanas, boa constrictors, vipers, anacondas and tortoises, (4) amphibians like frogs, salamanders and newts, and (5) the many decorative fish that live in creeks, quebradas and caños and depend on the forest for food and shaded waters.

One often forgotten beneficiary of reforestation is insect and worm life, specifically species that are rarely seen out in the open, but which play important roles in ecology and in the environment.  These insects convert deadfall into food for the trees, breakdown pollutants and improve the soil. They also provide food to many creatures that use the forest as habitat, and therefore form an indispensable link in the food chain. Needless to say, a healthy forest also supplies an entire level of additional activity that is either invisible to the human eye or ignored by us, such as bacteria, fungi, lichens, mosses and a variety of single and multi-cell organisms that are so important for life on Earth.