Brazil: Domestic price trend puzzle because of Real/US$ exchange rate

Source:
ITTO's Tropical Timber Market Report
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On the domestic market wood product prices in Brazilian reals have increased by an average 2.0% over the past three months. However, average prices, in US$ shown in the tables below, illustrate that in dollar terms there has been a downward movement in prices of 3.9%. This is due to the appreciation of the Brazilian currency against the US dollar during the period reported.

New Forest Concession in Rondônia State
The result of competitive public bidding for forest concessions in the national forest of Jacundá in the state of Rondônia (Jacundá FLONA ) was made public by the Brazilian Forest Service (SFB) on March 5, 2013.
The Madeflona Industrial Wood Company won the bid for forest management units (FMUs) 1 and 2, covering 55,000 and 32,700 hectares, respectively. The forest concessions available also included a third FMU of 23,600 hectares, but there were no bids from qualified candidates for this FMU.

There were a total of 11 bids for the available concessions and the bids were opened in public to ensure transparency in the selection of concessionaries.With the completion of the allocation process the next step will be the signing of concession contracts. Each concession agreement is valid for up to 40 years for the sustainable harvesting of timber and non-timber products. The Jacundá FLONA is the second national forest in which harvesting concessions have been made available in Rondônia state.

IBAMA Seizes illegal timber in Pará state
Inspectors of the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) seized 8,000 cubic metres of illegally harvested timber in an area 200 kilometres from the city of Santarem, in the Pará state, in the Amazon region. The volume seized is equivalent to about 320 truckloads of logs. This seizure was the result of one of the first operations of IBAMA in this state in 2013. Part of confiscated timber will be transported by the Civil Defence Force but, because of access problems, some logs will be destroyed where they have been stored after seizure.

In regions monitored by IBAMA, inspection teams have located illegal log storage sites and have removed illegal logging camps and seized boats that were used to transport illegal products. This year five clandestine loading points were shut down. In the state of Mato Grosso IBAMA inspectors are working with security force troops to ensure greater surveillance. IBAMA says that with the help of the troops it will be able to double the number of inspection teams in the region.

Satisfying EU requirements on legal origin
According to ABIMCI the EUTR, which requires proof of origin of the wood raw materials used to manufacture products, will not affect trade from Brazil as Brazilian entrepreneurs comply with requirements on the legal origin of timber. ABIMCI reaffirmed that there is no illegal timber or wood products being exported from Brazil. The EUTR, says ABIMCI, could result in a marketing advantage for Brazilian exporters as some of its competitors´ in the European market may find it difficult to meet the requirements of the EUTR.

Europe is the main destination for Brazilian wood products. In 2012, Europe purchased 65% of exported plywood. ABIMCI is working with the timber associations in Europe as well as the European Timber Trade Federation and other federations in the EU member states to provide information on the capacity of Brazilian exporters to satisfy the new EU legal requirements.

International funds to preserve forests not reaching Brazil
A recent analysis of the flow of funds for forest conservation shows that only around 39% of the US$ 597 million pledged by four private foundations and five government agencies were disbursed during the period 2009 to 2012. Most of the funds reportedly went to NGOs and government agencies for three purposes; support for projects on Reducing Emissions from Deforestation and Forest Degradation (REDD+), empowering communities and for developing new national policies.

Despite the low level of funding for practical conservation, the flow of funds in Brazil is said to be higher than other countries that also have REDD+ programmes. The flow of funding is said to be as low as 18% in Vietnam, 3% in Ghana and just 1% in Ecuador. The main reasons cited for the slow flow of funds are excessive bureaucracy in the recipient countries and the poor capacity of recipient organizations to manage the funds in an open and transparent manner. It is pointed out by analysts that the lack of a clear regulatory framework for REDD projects in Brazil makes disbursement of development funds difficult.


Domestic Log Prices

Brazilian logs, mill yard, domestic US$ per m3
Ipê 163
Jatoba 114
Guariuba 89
Mescla (white virola) 93


 Sawnwood Prices

Sawnwood, Belem/Paranagua Ports, FOB US$ per m3
Jatoba Green (dressed) 1,330
Cambara KD 725
Asian Market (green)        Guariuba 354
Angelim pedra
825
Mandioqueira
302
Pine (AD) 220
Brazil sawnwood, domestic (Green)
US$ per m3
Northern Mills (ex-mill)     Ipe 906
Jatoba
630
Southern Mills (ex-mill)     Eucalyptus (AD) 247
Pine (KD) 1st grade
231


 Veneer Prices

Veneer, Export  (Belem/Paranagua Ports) FOB US$ per m3
White  Virola  Face  2.5  mm 341
Pine Veneer (C/D) 240
Rotary cut Veneer, domestic US$ per m3
(ex-mill Northern Mill)      Face    Core
White Virola      272   224


 Plywood Prices

Plywood Export, FOB US$ per m3
White  Virola  (US Market)  
5.2 mm OV2 (MR)
498
15 mm BB/CC (MR)
448
White Virola (Caribbean Market)  
4mm BB/CC (MR)
621
12mm BB/CC
456
Pine Plywood EU market, FOB US$ per m3
9mm C/CC (WBP) 358
15mm C/CC (WBP) 332
18mm C/CC (WBP) 330
Plywood Prices, domestic (ex-mill Southern mill) US$ per m3
Grade MR (B/BB)  White Virola 4mm 806
 White Virola 15mm
593
Domestic prices include taxes and may be sbject to discounts.


Export Prices For Other Panel Products

Belem/Paranagua Ports, FOB US$ per m3
Blackboard Pine  18mm  5 ply (B/C) 415
Domestic Prices, Ex-mill, Southern Region  
Blackboard White Virola faced 15mm 563
Particleboard 15mm 363


Export Prices For Added Value Products

FOB Belem/Paranagua Ports US$ per m3
Decking Boards     Cambara 960
Ipê
2,584
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