Domestic wood product prices, in Brazilian Real (BRL),
have remained stable since the last report, however prices
in US$ fell by about 1% due to a slight appreciation of the
U.S. dollar against the BRL over the period. This dollar
rise comes after over a year of depreciation compared to
BRL.
Economic indicators
The Consumer Price Index (IPCA) increased by 0.37% in
December 2009, moving to 0.04 percent below the
November rate, according to the Brazilian Institute of
Geography and Statistics (IBGE). In December 2008, the
index was 0.28%. Hence, IPCA in 2009 was 4.31%, 1.59
percent below the 2008 rate (5.90%).
In November 2009, the average exchange rate was BRL
1.73 per US$, compared to BRL 2.27 in the same month
of 2008. In December 2009, the average exchange rate
was BRL 1.75 per US$, while it stood at BRL 2.40 in the
same month of 2008. These data show the strong
appreciation of the Brazilian currency against the dollar
over the period.
The Monetary Policy Committee (Copom) of the Central
Bank, in a meeting in early December, kept the prime
interest rate (Selic) at 8.75%, the same since July 2009.
The Selic was 12.75% at the beginning of 2009. The next
Copom meeting is scheduled for late January 2010.
Timber shortage in Mato Grosso
Continued torrential rains in state of Mato Grosso since
the end of last year will affect the volume of raw material
available to the timber sector, according to an assessment
by the Wood Industries Union of Northern Mato Grosso
(SINDUSMAD). Between February and March, logging,
skidding and transportation of any timber species is now
prohibited.
This ban on logging and transportation derives from a new
federal rule due to come into effect this year and be
effective from February 1st through April 1st.
This prohibits the movement of equipment and trucks that
are used in logging and extraction/transportation in forest
management areas in the natural forests across the country.
The aim of the rule is to bring to an end the soil
degradation and damage done during logging in the time
of heavy rains.
Locally, this period is also known as the ‘Piracema da
Madeira’ (‘Wood Spawning’) period in a reference to this
period of the year when fishing certain species is
prohibited in some regions to allow the fish to breed.
According to SINDUSMAD, there will be shortage of
some timber species such as Cambará and Cedar in the
market. These species are widely used in civil
construction, as structural timber for construction, roof
finishing, ceilings and doors. Cedar and Cambará are also
used in the furniture industry for standard furniture
manufacturing and for internal furniture parts.
The timber sector is currently one of the main economic
sectors in Mato Grosso. According to the State
Environmental Secretary (SEMA), sales of the sector from
February 3, 2006 to December 6, 2009 exceeded R$ 6.1
billion; of which, R$ 3.7 billion was from trade in the
domestic market and R$ 1.4 billion in the international
market.
Effects of tax reduction
The furniture and wood sectors have received a substantial
benefit from the introduction of the IPI (Tax on
Industrialized Products) tax reduction, a measure
promoted by the federal government to stimulate industrial
sectors badly affected by the economic crisis last year.
With the new tax structure wooden furniture and other
materials have zero IPI.
As a result, the final consumer will benefit from an
average discount of 10% on products. Analysts say this
measure will certainly impact the entire production chain,
such as timber, wood products, flooring, furniture factory,
furniture parts and accessories, and the trade as a whole.
The reduction affects mainly middle class consumers and
the results have already been positive. To take advantage
of the current stimulus, many stores and businesses have
developed incentives for consumers. The manufacturing
sector is already preparing to meet the increasing demand.
With the benefit from the IPI reduction and with the
growing interest of companies to invest in technology and
innovations, 2010 seems to be promising for the whole
wood and furniture production and trade chain.
November/December exports
In November 2009, exports of timber products (except
pulp and paper) fell 6.0% compared to values from
November 2008, (US$ 201.3 million to US$ 189.3
million).
Pine sawnwood exports fell 18% in value in November
2009 compared to the same month of 2008, from US$ 9.5
million to US$ 7.8 million. In volume terms, exports fell
8.3% from 30,300 cu.m to 27,800 cu.m over the period.
Exports of tropical sawnwood also fell significantly both
in volume and in value, from 55,300 cu.m in November
2008 to 48,400 cu.m in November 2009, and from US$
29.2 million to US$ 25.7 million, respectively over the
same period.
This corresponds to a 12.5% fall in volume and 12% in
value.
Pine plywood exports increased 24% in value in
November 2009 compared to the same period of 2008,
from US$ 21.3 million to US$ 26.4 million. The exported
volume increased 21% during the same period, from
79,700 cu.m to 96,700 cu.m.
Exports of tropical plywood were down from 12,300 cu.m
in November 2008 to 9,900 cu.m in October 2009,
representing a 19.5% fall. In value, a 29% reduction was
recorded over the period, from US$ 7.9 million to US$ 5.6
million.
In the case of wooden furniture, the exported value
remained stable; it was US$ 46.7 million in November
2008 and remained at US$ 46.7 million in November
2009.
In December 2009, exports of timber products (except
pulp and paper) fell 9.0% compared to values from
December 2008, from US$ 240.5 million to US$ 218.9
million.
Pine sawnwood exports fell 18.2% in value in December
2009 compared to the same month of 2008, from US$ 15.9
million to US$ 13.0 million. In volume, exports decreased
17.8% from 54,400 cu.m to 44,700 cu.m over the period.
Exports of tropical sawnwood also fell significantly both
in volume and in value, from 56,200 cu.m in December
2008 to 49,100 cu.m in December 2009 and from US$
27.5 million to US$ 25.5 million, respectively over the
same period. This corresponds to a 12.6% fall in volume
and 7.3% in value.
Pine plywood exports were down 11.7% in value in
December 2009 compared to the same period of 2008,
from US$ 30.7 million to US$ 27.1 million. The exported
volume dropped 22% during the same period, from
121,800 cu.m to 94,800 cu.m.
Exports of tropical plywood declined from 15,100 cu.m in
December 2008 to 8,100 cu.m in December 2009,
representing a 46.4% fall. In value, a 46.7% reduction was
recorded over the period, from US$ 9.2 million to US$ 4.9
million.
The value of December wooden furniture exports fell from
US$ 59.2 million December 2008 to US$ 53.2 million in
December 2009, representing a 10% decline.
Furniture Exports in 2009
The furniture sector saw a big drop in exports for the
second consecutive year. Brazilian furniture exports ended
2009 with a fall of 28.5% compared to the previous year.
The sector's foreign sales totaled US$ 706.9 million.
US imports of Brazilian furniture declined 41% in 2009,
dropping to a value of only US$ 95 million in 2009.
Nevertheless, the US continues to be the main importer of
Brazilian furniture, accounting for 13% of the total exports
of the sector.
Argentina follows in second place with an 11% share of
the total Brazilian furniture sector exports, but sales were
down 37% in 2009 to US$ 75.7 million. In third place was
the UK which accounted for a 10% share of furniture
exports from Brazil. This business was worth around US$
72 million in 2009, representing 1.2% drop compared to
2008.
Cuba was the country with the highest growth in
purchasing Brazilian furniture, despite having only a
minor share of Brazil’s exports at only 2% of total export
sales. Exports to Cuba increased some 60% in the period,
and the Southern state of Rio Grande do Sul was the main
exporter.
Increased exports via inland routes
The inland customs offices, or the so-called ‘dry ports’ in
the state of Mato Grosso, as well as in other parts of Brazil
have many advantages to facilitate foreign trade say
analysts. The main advantages claimed are the efficient
processing of documentation and the shortened deliver
times to the final destination.
In addition, all customs clearance and documentation both
for imports and exports are made in the state itself, making
the procedure easier for companies that want to trade.
The latest reports on the imports through the Dry Port in
Cuiabá (capital of state of Mato Grosso) have shown that
companies operating in the state seemed capable of
weathering the effects of the international crisis in 2009.
According to customs data, the annual imports in 2009
increased 23% compared to 2008, and (US$ 159.99
million to US$ 197.34 million). The first products to be
exported this year will be teak wood from plantation
forests. It is expected that exports of this product will
reach 35 to 40 containers per month, approximately 1,000
cu.m (about US$ 1.5 million).
brazilBrazil Log Prices
(domestic)
Brazilian logs,
mill yard,
domestic
US$
per m3
Ipê
147
⇓
Jatoba
105 ⇓
Guariuba
70 ⇓
Mescla (white virola)
77 ⇓
Brazil Sawnwood Prices
Sawnwood,
Belem/Paranagua Ports, FOB
US$
per m3
Jatoba Green (dressed)
787
Cambara KD
459
Asian Market
(green) Guariuba
261
Angelim pedra
595
Mandioqueira
229
Pine (AD)
189
Brazil
sawnwood, domestic (Green)
US$ per m3
Northern Mills
(ex-mill) Ipe
695 ⇓
Jatoba
534 ⇓
Southern Mills
(ex-mill) Eucalyptus (AD)
191 ⇓
Pine (KD) 1st grade
247 ⇓
Brazil Veneer Prices
Veneer, FOB
(Belem/Paranagua Ports)
US$
per m3
White Virola Face
2.5 mm
290
Pine Veneer (C/D)
205
Rotary cut
Veneer, domestic
US$
per m3
(ex-mill Northern Mill)
Face
Core
White Virola
262219
Brazil Plywood Prices
Plywood, FOB
US$
per m3
White Virola (US Market)
5.2 mm OV2 (MR)
464
15 mm BB/CC (MR)
401
White Virola (Caribbean Market)
4mm BB/CC (MR)
505
12mm BB/CC
405
Pine
Plywood EU market, FOB
US$
per
m3
9mm C/CC (WBP)
271
15mm C/CC (WBP)
247
18mm C/CC (WBP)
242
Plywood,
domestic (ex-mill
Southern mill)
US$
per
m3
Grade MR (B/BB) White
Virola 4mm
889 ⇓
White Virola 15mm
650 ⇓
Domestic
prices include taxes and may be sbject to discounts.
