Pine Sawlog Prices Were Up in Brazil Despite Lower Demand in the 4Q, Report Says
The export-dependent sawmilling industry in Brazil has been cutting back production in 2007 as shipments to the US fell. With the reduced operating rates, demand for sawlogs declined and timber prices leveled off in the 4Q, according to the market report Wood Resource Quarterly. However, with the strengthening of the Brazilian Real, wood costs continued up to a record high in US dollars terms.
With the reduced production of lumber, pine sawlog prices have flattened out in Real terms last fall. However, as the US dollar has weakened, average sawlog costs moved up, reaching a record high of US$70/m3 in the 4Q, according to the Wood Resource Quarterly (WRQ). Wood costs for sawmills in Brazil are now higher than in many markets in North America. As a result of a weakening US dollar and increased domestic demand for sawlogs in Brazil the past few years, sawlog prices in 2007 were over three times higher than in 2003.
The weaker demand for sawlogs is expected to continue in the coming months with downward pressure on sawlog prices. In Southern Brazil, where a majority of the pine plantations are located, there are some forest companies that are now selling sawlog-size timber to the pulpmills as they pay higher prices than sawmills do.
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.
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