Brazil: Timber product prices on an upward trend

Source:
ITTO's Tropical Timber Market Report
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The average price of timber products in Brazil in BRL increased by 2.1% from the previous fortnight. Prices in US dollars also gained 0.59% due to the slight appreciation of the Brazilian currency against the US dollar.

Mixed performance of wood product exports in last two months of 2010
In November 2010, the value of timber product exports (excluding pulp and paper) increased 7.6% to US$204 million from US$189 million in November 2009. Exports of timber products continued to improve in December showing 2.5% increase compared to December 2009, from US$219 million to US$224 million. In November, exports of tropical sawnwood rose in terms of both volume and value, from 48,400 cu.m worth US$25.7 million recorded in November previous year to 53,200 cu.m worth US$28 million. However, exports declined in December from 49,100 cu.m worth US$25.5 million recorded in December previous year to 42,300 cu.m worth US$23.1 million.

Exports of tropical plywood plunged 28% year-on-year in November, from 9,900 cu.m to 7,100 cu.m, but increased 11% year-on-year in December, from 8,100 cu.m to 9,000 cu.m. In value terms, a 28.6% decline was recorded yearon- year in November, from US$5.6 million to US$4.0 million, followed by a rebound of 16.3% in December, from US$4.9 million to US$5.7 million. Pine sawnwood exports surged 35% year-on-year in November, from 40,900 cu.m to 55,300 cu.m, but slid 17.1% year-on-year in December, from 65,900 cu.m to 54,600 cu.m. In value terms, a 62% jump was recorded year-on-year in November, from US$7.8 million to US$12.6 million, followed by a 3.8% decline in December, from US$13 million to US$12.5 million.

Pine plywood exports increased 0.8% year-on-year in November, from 85,000 cu.m to 85,700 cu.m and advanced further in December by 13% year-on-year, from 83,300 cu.m to 94,400 cu.m. In value terms, a 15% increase was recorded year-on-year in November, from US$26.4 million to US$30.3 million, and a further surge of 23% in December, from US$27.1 million to US$33.4 million. In contrast, the value of wooden furniture exports slipped 0.2% in November and 3.4% in December year-on-year to US$46.6 million and US$51.4 million respectively.

Authorities monitor inflationary trends in economy
According to the Brazilian Institute of Geography and Statistics (IBGE), the Consumer Price Index (IPCA) rose 0.83% in November and 0.63% in December year-on-year. The accumulated IPCA for the year 2010 was 5.91%, 1.6 percentile points above the 2009 rate (4.31%) In November 2010, the average exchange rate for BRL to the US dollar was BRL1.71/US$ compared to BRL 1.73/US$ during the same month of 2009. In December 2010, the average exchange rate stood at BRL 1.69/US$, compared to BRL 1.75/US$ in December 2009. This shows that BRL has further strengthened against the US dollar over the period. The Copom (Economic Policy Committee) has kept the prime interest rate (Selic) at 10.75% since July 2010.

Brazilian Forest Service aims at expanding national forests (FLONAS)
It was reported earlier that the area available for forest concessions in the Brazilian Amazon exceeded 1 million hectares. Recently the Brazilian Forest Service (SFB) announced its intention to increase forest concession areas for logging companies and forest areas for community management. Furthermore, SFB will speed up the forest concession approval process. According to SFB, there are 50 million hectares of forests which can potentially be turned into national managed forests (FLONAS). At least 35 million hectares of national managed forests would be required in order to meet current timber demand.

In addition, part of the future timber supply will come from community forest management projects aimed at offering sustainable economic alternatives to illegal logging. SFB believes that community forest management projects are among those likely to receive international funds in the coming years.

New export strategy for furniture manufacturers in 2011
According to the Chamber of Furniture Industry Development of FIESC (Federation of Industries of the state of Santa Catarina), the furniture manufacturers of Santa Catarina will focus on selling more furniture in the domestic market. The strategy change is due to the weakening of US dollar against the Brazilian Real. Santa Catarina is the major state in Brazil exporting furniture. In 2009, furniture sales in the domestic market grew 5.2% compared to 2008. In October 2010, the accumulated furniture sales were up by 20% over the same period in 2009.

The value of furniture exports from Santa Catarina was US$260 million in 2009, accounting for 31% of the total Brazilian furniture exports. In the period from January to November 2010, furniture exports totalled US$248 million in value. The main export destinations were the US, France, the UK, the Netherlands, Spain and Germany.

Brazil stands out in furniture production
According to the Italian Research Institute (CSIL), Brazil is the world’s 13th largest furniture supplier and its industry is growing. The institute predicts that the Brazilian furniture industry will grow by 3% – 4% in 2011 and 2012. According to CSIL, besides the economic growth in Brazil, the expansion of the furniture industry is due to several other factors, such as the significant expansion in civil construction, growing middle class, and the country’s competitive position in the international market. In the next two years, furniture consumption will be much greater in emerging economies than in developed economies.

A large share of furniture production and sales is concentrated in the Southern and Southeast regions of Brazil. The furniture cluster consists of about 15,000 micro and small-sized companies. The annual panel production capacity is expected to grow from 6 million cu.m to 10.3 million cu.m by 2012. Brazilian furniture sales hit a record high in 2008. In 2009, sales went down due to the global economic crisis and stiff competition from Asian products. However, according to CSIL, furniture consumption increased in the Southern and Southeast regions of Brazil in 2010.

IBAMA introduces new timber export control
The Document of Forest Origin (DOF) used since 2006 to control the trade in forest products in the Brazilian domestic market has been adapted to be used for the export markets. The new module called “DOF Export” commenced operation on 10 January 2011 with the aim of improving transparency of the public administration and reducing bureaucracy.

DOF Export will be integrated to the state forest control system. Under the previous system, an entrepreneur had to register a timber courtyard in every export warehouse. With the new system, these warehouses are already preregistered and thus duplication is avoided. DOF can be also used as a REDD (Reducing Emissions from Deforestation and Degradation) tool to evaluate the legality of wood products originating from Brazil. The new system includes also a government database consisting information about foreign buyer companies.

With these features, a foreign buyer is guaranteed of the legality of wood products, thereby improving and enhancing the competitiveness of Brazilian forest products in the international markets. IBAMA has received delegations from several tropical forest countries, such as Indonesia, Ghana and Bolivia, which have shown their interest in adopting the Brazilian technology to control the forest products flow.

brazil Brazil Log Prices (domestic)
Brazilian logs, mill yard, domestic US$ per m3
Ipê 158
Jatoba 114
Guariuba 74
Mescla (white virola) 81

Brazil Sawnwood Prices
Sawnwood, Belem/Paranagua Ports, FOB US$ per m3
Jatoba Green (dressed) 867
Cambara KD 509
Asian Market (green)        Guariuba 276
Angelim pedra
662
Mandioqueira
244
Pine (AD) 201
Brazil sawnwood, domestic (Green)
US$ per m3
Northern Mills (ex-mill)     Ipe
766
Jatoba
588
Southern Mills (ex-mill)     Eucalyptus (AD)
201
Pine (KD) 1st grade
258

Brazil Veneer Prices
Veneer, FOB (Belem/Paranagua Ports) US$ per m3
White  Virola  Face  2.5  mm 298
Pine Veneer (C/D)
209
Rotary cut Veneer, domestic
US$ per m3
(ex-mill Northern Mill)
     Face    Core
White Virola
     273     225

Brazil Plywood Prices
Plywood, FOB
US$ per m3
White  Virola  (US Market)
5.2 mm OV2 (MR)
452
15 mm BB/CC (MR)
392
White Virola (Caribbean Market)
 
4mm BB/CC (MR)
 523
12mm BB/CC
420
Pine Plywood EU market, FOB
US$ per m3
9mm C/CC (WBP)
280
15mm C/CC (WBP)
260
18mm C/CC (WBP)
248
Plywood, domestic (ex-mill Southern mill)
US$ per m3
Grade MR (B/BB)  White Virola 4mm
962
 White Virola 15mm
699
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) 312
Domestic Prices, Ex-mill, Southern Region

Blackboard White Virola faced 15mm
588
Particleboard 15mm
382

Brazil Added Value Products
FOB Belem/Paranagua Ports US$ per m3
Edge Glued  Pine Panel
Korean market (1st grade)
625
US Market
494
Decking Boards     Cambara
622
Ipê
1,646

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