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Pulpwood Costs Are Going Up in Brazil as Competition for Smaller Logs Increased in 2007, According to Wood Resource Quarterly

Pulpwood costs in Brazil will continue to be record high as competition increases for smaller logs between the pulp, energy and wood panel sectors. Wood costs in the 4Q/07 were almost twice the level of four years ago.

Seattle, WA, April 18, 2008 --( Brazilian pulpmills had to pay 8% more for open-market pulpwood and wood chips in the 4Q/07 as compared to the previous quarter. The increased competition for smaller pine logs between pulpmills, energy producers and the wood panels sector has pushed prices to new records, averaging almost $100/odmt in the 4Q. Less than four years ago, pine pulpwood prices were just over $20/odmt. The pulpwood market in Brazil has gone through a major transformation; from previously having had some of the lowest conifer fiber costs in the world to being close the global average as reported by the Wood Resource Quarterly (WRQ).

Eucalyptus pulpwood prices purchased in the open market have experienced a similar price trend the past five years with record prices in 2007. The majority of the Eucalyptus wood fiber consumed by Brazilian pulpmills is still internally sourced at a cost lower than the market price. Hardwood pulpwood costs in Brazil remain among the lowest of all regions tracked by the WRQ, with only Indonesia, Chile and the US South having lower delivered wood costs.

The pulp and paper industry had another record year in Brazil in 2007, with pulp production up 2.8% and paper production up 5.5% as compared to 2006. The total pulp production was 11.8 million tons, of which 9.8 million tons was chemical hardwood pulp, and two million tons softwood pulp. With no slowdown in sight for investments in the pulp sector, the Brazilian Pulp and Paper Association is expecting a 17% increase in pulp production over the coming two years, which would make Brazil the third largest pulp producer in the world after the US and Canada.

Global pulpwood and sawlog market updates are included in the 50-page publication Wood Resource Quarterly. The report, established in 1988, also includes regular updates of pulp, lumber and biomass markets and has readers in over 20 countries.

Contact Information:
Wood Resources International
Hakan Ekstrom
Seattle, USA

Contact Information
Wood Resources International LLC
Hakan Ekstrom
425 402 8809

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