JOHN HAWKINS A follow to: Why should farmers pay when Gunns doesn’t
Heads of Agreement between Gunns Ltd and Forestry Tasmania
The Long Term Pulpwood Supply Agreement
The current stumpage price of Tasmania’s Native Forest due to the collapse of BHKP
Slaked Lime, I refer you to the The Heads of Agreement between John Gay and Bob Gordon signed on the 18th October 2007 under pricing issues (see Attachment) used to calculate Base stumpage for Native Forests as follows:
3.1. The base pulp price cif North Europe is agreed to be AUD $800 per air dried tonne, currently 18 May 2009, 361.84 Euro’s or $650 approx.
3.2. Hardwood pulp price index the pulp price information to be used is the PIX Index Values for BHKP cif North Europe published by FOEX Indexes Ltd averaged over 6 months, approx 366 Euro’s or approx $660.
To set the stumpage price the calculation for Native Forest is at 4.2
NewS=BaseS * (1+EF2 * DPPI / BasePPI) * (1+EF3*(NewPPI-BasePPI-100)/(BasePPI+100))
I calculate if the “Gay Gordons” agreement is still valid the new stumpage price as a result of the depreciation of BHKP pulp prices is now under A$10 per G.M.T. As you know and can see from the above equation this is not a very simple calculation. I am not going to release my accurate figure until you come up with yours, using this equation spelt out.
I also refer you to the Heads of Agreement, para 5, dot point 3, and I quote “Forestry Tasmania will deliver at Mill door (or other central delivery or receival point as subsequently agreed) from the mill door zone.” Please explain why you state this does not mean what it says. If it means what it says firewood at $75 a tonne, split and delivered, when compared to the fact that Forestry Tasmania sells our native forests delivered to the mill at less than A$10 per GMT means … collusion.
John Hawkins
Chudleigh
