Brazil: Tropical sawnwood exports on the mend

Source:
ITTO's Tropical Timber Market Report
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In July 2010, exports of timber products (except pulp and paper) increased by 24% from US$182 million in July 2009 to US$227 million. After a decline in June, exports of tropical sawnwood improved in terms of both volume and value, from 44,600 cu.m in July 2009 to 45,400 cu.m in July 2010 and from US$18.9 million to US$21.1 million, representing 1.8% increase in volume and 11.6% in value.
Exports of tropical plywood continued to fall; from 9,500 cu.m in July 2009 to 8,800 cu.m in July 2010, down 7.4%. In value terms, the drop was 4.1%, from US$4.9 million to US$4.7 million.

After a decline in June, pine sawnwood exports increased 20% in July 2010 compared to the July 2009, from US$14 million to US$17 million. In terms of volume, exports rose 2.8% from 70,500 cu.m to 72,500 cu.m over the period.
The value of pine plywood exports jumped 39% in July 2010 compared to the level in July 2009, from US$22 million to US$30 million. However, export volumes decreased by 4.5% during the period, from 83,800 cu.m to 80,000 cu.m.
For wooden furniture, the value of exports rose slightly by 0.2% compared to the level in June 2009 to US$49.4 million in June 2010.

Volatility of tropical timber exports from Pará
In the state of Pará, timber product exports rose 7% in value during the first half of 2010 compared to the same period last year while export volumes increased by 3.9%. However, there was no significant boost in exports as forecast. In particular, exports eased towards the end of the period.
Despite the positive growth in the first half of 2010, exports have fluctuated since the beginning of the year. According to analysts, this is due to the fact that export markets have not fully recovered from the global financial crises.

Impact of new EU legislation on illegal timber trade
The European Union’s decision to ban the trade of illegal timber will not have any major impact on Brazilin timber sector in the short run, say a Brazilian analyst. The reason is that most of the Brazilian timber is sold in the domestic market and little goes to the EU. Brazil’s wood product exports are forecast to grow as the global availability of tropical hardwood is diminishing while the sustainable tropical timber supply from the Amazon rainforest has the potential to be increased. In the medium to long-run, the new EU legislation may work as an incentive to strengthen due diligence systems in Brazil to verify the legality of timber from Brazilian forests.
All in all, the new EU legislation is considered to have a positive effect on the Brazilian timber sector. As the short-term impact is estimated to be slight, this decision by the EU is expected to result in new attitudes amongst Brazilian timber producers.

Timber prices in US$ rise
The price average of timber products in Brazil remained unchanged from the last fortnight period. However, the prices quoted in the US dollars increased by 1.70% due to the appreciation of Brazilian currency against the US dollar.

Economic growth remains steady
According to the Brazilian Institute of Geography and Statistics (IBGE), the Consumer Price Index (IPCA) of July 2010 remained steady at 0.43% increasing only slightly from June. The July’s figure is 0.24% higher than in same month last year. The accumulated IPCA for the first seven months of the year was 3.1%, posting a 4.60% increase over the past 12 months. In July 2010, the average exchange rate was BRL1.77/US$ compared to BRL 1.93/US$ in the same month of 2009, showing further appreciation of the Brazilian Real against the US dollar over the period.
In an attempt to keep inflation within the targeted range, the Copom (Economic Policy Committee) raised the prime interest rate (Selic) to 10.75% per year in July, the third increase during the current year.

Logging in Pará state forests
The Promadeira, a major timber sector fair was held in August in Sinop, Northern Mato Grosso. At the fair, there was a public debate on concessions and harvests of public forests which have offered an alternative for timber manufacturers to source supplementary timber for industrial processing. The topic was debated by experts considering the legal aspects, requirements and criteria for harvesting set by the federal government.
Tapajos National Forest, also known as Tapajós Flonam, is the major public forest area in the Sinop region that has the potential to provide quality timber for the industry. Tapajós Flona is a natural forest area with a rich variety of commercial timber species suitable for different processing applications. Tapajós Flona is located in the Western Pará, in the counties of Belterra, Aveiro, Rurópolis and Placas, accessible by the federal road BR-163. IBAMA (Brazilian Institute of Environment and Renewable Natural Resources) of the Ministry of Environment has approved the management plan of Tapajos Flona in 2005, which also specifies the allowable timber species to be harvested. The legal timber extraction in Tapajós Flona has recently started.

Brazilian Forest Service funds sustainable forestry projects
The National Fund for Forestry Development (FNDF) managed by the Brazilian Forest Service (SFB) has invited applications for sustainable forest project funding. The total estimated fund is BRL2.2 million (about US$1.25 million) in 2010 aimed at strengthening forest management.
The Brazilian Forest Service announced that the FNDF is in line with the strategy introduced in Public Forest Management Law requiring a specific fund to support the forest sector. The FNDF will be implemented in cooperation with the National Environment Fund (FNMA), Forestry Board of Ministry of Environment and Chico Mendes Institute for Biodiversity Conservation (ICMBio).
In addition to resources from the executive agencies, the FNDF harnesses financial resources from forest concessions. With the expansion of public forest concession areas scheduled for 2015, the budget of FNDF will rise to BRL20 million (about US$11.4 million) per year.

brazil Brazil Log Prices (domestic)
Brazilian logs, mill yard, domestic US$ per m3
Ipê 148
Jatoba 106
Guariuba 70
Mescla (white virola) 76

Brazil Sawnwood Prices
Sawnwood, Belem/Paranagua Ports, FOB US$ per m3
Jatoba Green (dressed) 832
Cambara KD 479
Asian Market (green)        Guariuba 267
Angelim pedra
622
Mandioqueira
232
Pine (AD) 195
Brazil sawnwood, domestic (Green)
US$ per m3
Northern Mills (ex-mill)     Ipe
710
Jatoba
541
Southern Mills (ex-mill)     Eucalyptus (AD)
190
Pine (KD) 1st grade
242

Brazil Veneer Prices
Veneer, FOB (Belem/Paranagua Ports) US$ per m3
White  Virola  Face  2.5  mm 297
Pine Veneer (C/D)
210
Rotary cut Veneer, domestic
US$ per m3
(ex-mill Northern Mill)
     Face    Core
White Virola
     258       214

Brazil Plywood Prices
Plywood, FOB
US$ per m3
White  Virola  (US Market)
5.2 mm OV2 (MR)
490
15 mm BB/CC (MR)
421
White Virola (Caribbean Market)
 
4mm BB/CC (MR)
 525
12mm BB/CC
422
Pine Plywood EU market, FOB
US$ per m3
9mm C/CC (WBP)
291
15mm C/CC (WBP)
274
18mm C/CC (WBP)
263
Plywood, domestic (ex-mill Southern mill)
US$ per m3
Grade MR (B/BB)  White Virola 4mm
900
 White Virola 15mm
656
Domestic prices include taxes and may be sbject to discounts.

Other Brazil Panel Prices
Belem/Paranagua Ports, FOB US$ per m3
Blackboard Pine  18mm  5 ply (B/C) 315
Domestic Prices, Ex-mill, Southern Region

Blackboard White Virola faced 15mm
562
Particleboard 15mm
360

Brazil Added Value Products
FOB Belem/Paranagua Ports US$ per m3
Edge Glued  Pine Panel
Korean market (1st grade)
664
US Market
493
Decking Boards     Cambara
611
Ipê
1,609

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