Brazil: Alta Floresta producers shift to domestic market
04/07/2008 - 16:23
According to Só Notícias, exports from Alta Floresta companies decreased in the first five months of 2008. Total exports worth USD6.2 million were 25% lower than observed in the same period of 2007, when they were valued at USD8.4 million. The value of exports fell since their highest level in January 2008, when exports totaled USD1.6 million. In May, however, exports were only worth USD757,000.
Trade with the US alone decreased 36%, dropping from USD4.2 million in January to May 2007 to USD2.7 million during the same period in 2008. Exports to Spain were worth USD1.5 million during the 2008 period. The main reason for the dramatic changes in exports was the weak US dollar, which has been fluctuating between USD1=BRL 1.61 and USD1=BRL1.63 in June. In May, it reached its lowest in the past nine years, with an average of USD1=BRL1.64. Thus, exports of forest products in the region have become less profitable and the domestic market has become more attractive for Alta Floresta producers, mainly due to the expansion of the civil construction market.
Total forest products trade of the state Mato Grosso in May 2008 was BRL141 million, out of which BRL24.7 million (17%) were sold to other states, BRL83.5 million (59%) exported and BRL33.2 million (23%) sold within the state. In April, wood products sales reached BRL139 million, out of which BRL30.8 million (22%) went to other states in Brazil, BRL79.8 (57%) to the international market and BRL28.4 million (20%) to sales within the state.
Paraná State heightens attention to domestic markets
With a decrease in exports to the US over the past 2 years, the wood industry of the state of Paraná has increased its focus on the domestic market, taking advantage of the boost from the civil construction market in Brazil. Paraná, the largest national producer of pine plywood, has expanded its sales to markets such as Europe, the Middle East and Africa.
According to the Brazilian Association for Mechanically Processed Timber (ABIMCI), Europe ranks first among the largest importers of pine plywood from Brazil. In the first two months of 2008, out of 313,000 m³ of pine plywood exported, Europe purchased 246,000 m³ (79%) while the US purchased 29,000 m³ (9%). Africa and the Middle East together imported 13,000 m³.
The slow pace of civil construction in the US, considered the lowest in the last ten years, and the depreciation of US dollar have affected exports of pine plywood, doors and frames used in civil construction. Brazil exported 1.2 million m³ of pine plywood to the US in 2005, but exported only 347,000 m³ in 2007. Companies have started to diversify their products and invest in the production of added-value products. In the last two years, many companies in the wood industry had to reduce production, lower costs and cut personnel due to decreased demand from the US and unfavorable exchange rates. Some Brazilian producers are now shifting exports from the US to Europe, Mexico, Asia and Africa. Ninety percent of plywood production (4,000m³/month) is currently oriented to European markets alone. Companies are also trying to invest in supplying the domestic market, but admit that the potential of the domestic market is limited, since Brazil does not have a tradition of building wood framed houses.
Brazil Log Prices
(domestic)
Brazilian logs,
mill yard,
domestic
US$
per m3
Ipê
152
⇑
Jatoba
108 ⇑
Guariuba
73 ⇑
Mescla (white virola)
80 ⇑
Brazil Sawnwood Prices
Sawnwood,
Belem/Paranagua Ports, FOB
US$
per m3
Jatoba Green (dressed)
845
⇑
Cambara KD
465
Asian Market
(green) Guariuba
265
Angelim pedra
594 ⇑
Mandioqueira
234
Pine (AD)
200
Brazil
sawnwood, domestic (Green)
US$ per m3
Northern Mills
(ex-mill) Ipe
713⇑
Jatoba
548 ⇑
Southern Mills
(ex-mill) Eucalyptus (AD)
210 ⇑
Pine (KD) 1st grade
276 ⇑
Brazil Veneer Prices
Veneer, FOB
(Belem/Paranagua Ports)
US$
per m3
White Virola Face
2.5 mm
295
Pine Veneer (C/D)
210
Rotary cut
Veneer, domestic
US$
per m3
(ex-mill Northern Mill)
Face Core
White Virola
274 ⇑229⇑
Brazil Plywood Prices
Plywood, FOB
US$
per m3
White Virola (US Market)
5.2 mm OV2 (MR)
460
15 mm BB/CC (MR)
398
White Virola (Caribbean Market)
4mm BB/CC (MR)
507
12mm BB/CC
407
Pine
Plywood EU market, FOB
US$
per m3
9mm C/CC (WBP)
307
15mm C/CC (WBP)
276
18mm C/CC (WBP)
278
Plywood,
domestic (ex-mill
Southern mill)
US$
per m3
Grade MR (B/BB) White
Virola 4mm
938 ⇑
White Virola 15mm
685 ⇑
Domestic
prices include taxes and may be sbject to discounts.
