There are several ways to establish likely near term future trade activity in any commodity. Wood chips are no different.
IndustryEdge has just published, in the subscriber-only Wood Market Edge*, what we think may be the first estimate and projection for wood chip exports based on tracking of shipping movements. Both are based on less than one year’s prior data and are focussed on aggregate exports of wood chips from Australia.
The estimate is for the month of April 2014. The formal trade data for that month will only be available on 7th June. Even allowing for delays as we checked the analysis, our estimate of 430.0 kt is available two weeks prior to the formal data.
The projection is for the month of May 2014 and implies that in total, some 455.0 kt of wood chips will be exported from Australia over the course of May.
Currently, we calculate the margin for error on the estimates could be as high as 12%. However, when we back cast the methodology onto prior data, in 50% of cases, the margin for error was a more acceptable +/-3%. We expect accuracy will improve over time.
Like all methods, this approach has its advantages and disadvantages. One advantage is that it does not rely on accessing data from very busy people undertaking the exports. It is accordingly, less laborious and prone to human error. On the flip-side, one disadvantage is that gross ship weights are different to the quantity of wood chips loaded to each ship and the historical ratio of one to the other moves around more than is desirable.
While there are some methodological issues to solve, the data is also less reliable now than it will be in the future, because the number of observations is limited, although growing continuously.
Next month we will publish the accuracy of the estimate for April 2014 and a new estimate for May 2014.
In the meantime, if this analysis is of interest, please contact us.
* Subscribers to IndustryEdge wood market trade data services receive Wood Market Edge on a complimentary basis. Individual subscriptions are AUD1,000 (plus GST in Australia) per annum. Wood Market Edge is published 11 times per year because we take January off.
+61 3 5229 2470