Principles for Price Assessment
Price assessments from RISI Indices are the most relied-upon price assessments in the global forest products industry. Underlying our price assessments is our commitment to the following principles:
RISI’s mission is to provide transparency into markets, thus helping these markets operate more efficiently. We pursue this objective with openness: our methodology documents describe in detail how we arrive at price assessments and what exactly they represent.
RISI is completely independent and objective in its assessment of market prices. It has no affiliation with buyers or sellers of forest products, and each RISI Indices employee is prohibited from having a financial interest in companies whose values are affected by prices he/she reports. (See Conflicts of Interest policy)
RISI Indices is a separate business unit from RISI Analytics, which carries out RISI’s forecasting activities, ensuring that forecasting of future prices doesn’t influence assessment of actual prices.
Balance of buyer and seller data
Price assessments reflect price data from both buyers AND sellers of a given product/grade, a critical requirement to ensure that prices are an accurate representation of market activity. Assessments also reflect data from both large and small market participants.
In addition, roughly the same portion of RISI’s revenue comes from buyers of grade/products we report on as from sellers.
RISI’s price assessment methodology and specifications documents, along with the overall policies published in this section of RISI’s website and extensive internal procedures manuals, demonstrate the rigor of RISI’s price assessments. These methodologies have been developed based on extensive study of best practices in price assessments across a range of commodity industries.
Starting in 2015, RISI Indices has raised its assessment standards by adapting IOSCO’s Principles for Oil Price Reporting Agencies to the forest product market and incorporating them into our processes.
Information about market prices is a particularly sensitive area of antitrust law, so RISI’s procedures and methodologies are designed to minimize antitrust risk for data contributors. In addition to policies to ensure freedom from conflicts of interest, one of the most important principles to minimize antitrust risk is that of confidentiality of price data from individual companies. The identify of contributors to RISI price indices is strictly confidential, and the data presented in indices are always aggregated in such a way that it is impossible to deduce the identity of any data contributor. (See RISI’s Antitrust Compliance Policy.)