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What will happen to the price of logs on the wharf?

"we" may know…

Collectively a large amount of thinking in the New Zealand forestry industry goes into trying to make sense of log prices at the wharf. Log prices are not random, but are rather based on a few simple and rational price drivers, including, the current price, supply and demand, and people's anticipation of future supply and demand. Although these price drivers are simple, the price of logs at the wharf quickly becomes very complex and connected as a high number of intertwined market forces play out, such as exchange rates, influences of the weather, political issues, changes in shipping prices and the overall state of various countries' economies. And while it becomes nearly impossible to predict future log prices, we continuously study the market dynamics and try and make sense of its variability.

In his book "The Wisdom of Crowds" (2004), James Surowiecki argues that often people's combined opinion about relatively complex issues will supersede an individual's effort to make sense of something. SCION is currently testing the validity of this argument when it comes to understanding the log markets. The Value Chain Optimisation research group has created a simple web page where people can cast their vote as part of a "Log Price Opinion Index". Based on Surowiecki's argument there is a possibility that collectively, industry could have a good idea of how log markets will change in the near future. This approach has been shown in other industries to create some degree of predictability and confidence. A small survey revealed the word cloud below as important ideas that currently resonate in people's minds concerning the log markets.

What?

If you are interested in this then please join us in this research. It will take less than 5 minutes to cast your views on our web page

In return for your time we will disseminate the collective result to you at the end of February. Also, in time as the markets unfold we will distribute the accuracy of the index.