IMPORTANT INFORMATION 6-15-2017
RGI SA has been growing teak on plantations in Costa Rica since 1997, our main goal has always been to produce the best quality teak possible and with the aim to achieve the best outcome for our clients. When we plant and cultivate teak we can only assure that we produce the utmost achievable volume and quality, the market and demand for teak is out of our control.
Teak buyers have always given us positive feedback on the prominent level of quality in our teak and given us advantages over other teak growers in terms of best prices that the market can offer, faster services and secure payments.
However, the teak market has, despite of the higher expectations been frozen on a “Status Que” pricing since many years and the accepted minimum size has changed from being 34cm in circumference to now being 41cm as the lowest diameter on the small end of the trunk. This has of course caused a far less commercial volume per hectare.
One of the most significant reasons for the decline has been the illegal market of natural rain forest teak from Burma and Indonesia with ages of 60 to 110 years old teak. The deforestation of natural teak was internationally agreed and decided to be forbidden already more than 15 years ago and it was supposed to be controlled by certification demand on import and sales of teak (products as well as logs).
Now we are writing 2017 and this trade is still ongoing, it is forcing the prices and acceptance of younger plantation teak to be locked on a very low level.
This has, in addition to the effect of the climate changes (as pointed out many times in our newsletters), led to the consequences we now have experienced and now are displayed prominently on the outcome from the teak sales that became far lower than expected. Unfortunately, we cannot see any indication of movement in prices within any reasonable near future that would support an extension of the time frame for possibly increasing the yield, even before the hurricane we couldn´t see any positive tendency coming up.
Hurricane Otto became an additional setback and gave losses on the plantations and to the volume of commercial wood per hectare, this counts for all the farms but with some variation in the damage range, we have explained this in our news here at www.rgisa.com ever since the hurricane hit the plantations.
Later, when the outcome has been received from a final harvest, that specific participation contract is fulfilled and the contracted relation with RGI SA has ended on that contract. Some farms are already ongoing with the final harvest and in process of payouts; Monte Verde I and II, Vasconia, Amparo (MV III), Arco Iris (MV IV), Christo Rey (MV V), Olger and Mairena.
There is a company named "PharmaLead” who has been contacting many of our clients regarding investment opportunity that is involving taking the teak investment in commodity in return of a better gaining from their product. This has nothing to do with us in RGI SA nor with Teakwood, we have received several emails from clients that has been contacted by them and we have therefore reported this to the AFM. AFM are investigating this company since they are not licensed by the AFM (required in The Netherlands) and it is a nonlegal action to contact our clients with a secondary investment products based on our database. They sometimes even claim to be from Teakwood International and they ask you to invest the double of what was invested in teak. We strongly advise you against this offer from PharmaLead, in our opinion this must be a fraud and they cannot take over your contract with RGI