Mal, Fightinggreed has it covered. I can't answer your questions re the breakevens etc as, like most people I am going on publicly available information and as there is no analogue currently it is impossible to work out. Some of the broker reports provide harvest margins which are very high; I recall 64% margin, but I don't know what costs this includes.
In terms of competition from commercial plantations; TFC have a good audio of the FY results on their website, from about August I think. In that audio FW talks about the comprehensive study they conducted this year.
In part these guys scoured the world looking for potential competitors to TFC and they visited both established and 'imaginary' plantations (I guess this refers to BS scams). The logic is that any commercial Sandalwood that will come onto the market in the next 15 years must be in the ground already. Basically there are no plantations of scale established except TFC's.
This is why TFC can say, with confidence, that they will control 80% of supply in 2030 and can be highly confident in their global supply figures. The demand side is obviously less visible.
The shorts are certainly interesting and rising quite fast at 10.33% now. I can't find a fatal flaw from publicly disclosed information that would justify this and I can only think they believe a strongly rising USD is negative for TFC (???) but that logic doesn't follow IMO to the extent of going this short.
Cheers
John
TFC Price at posting:
$1.54 Sentiment: None Disclosure: Held
