Woodchip exports from Brazil and Uruguay rise, shipments from Chile drop: WRI
Eucalyptus plantations in Latin America are an important source of supply for pulp mills in China and Japan. However, Latin America’s share of total Asian import volume has been declining over the past five years due to increased availability of plantation fiber in Southeast Asia (mainly from Vietnam) and increased demand fiber from local pulp mills in Latin America. As a result, the continent’s total export volumes have steadily declined since 2018, when a record high of 4.6 million AMT was reached.
Over the past decade, Chile has been Latin America’s largest exporter. However, it has reduced shipments in 2021, while Brazil and Uruguay have increased their shares of the continent’s woodchip supply for overseas markets.
In 1Q/22, shipments from the three exporting countries, Brazil, Chile and Uruguay, increased quarter-on-quarter, with total volume reaching a two-year high of nearly 1 million AMT , reports the Timber Resources Quarterly. Brazil and Uruguay both flirted with records, while Chile shipped significantly less than its quarterly average volume of the last ten years. Despite the increase in shipments from Chile in 1Q/22, the total volume exported was the second lowest in almost a decade. Virtually all exports over the past decade have gone to China and Japan, the latter historically being the largest market. However, in recent years, shipments to China have fallen from 27% of total exports in 2018 to 53% in 1Q/22.
Over time, hardwood chip export prices from Latin America have fluctuated with market pulp (HBK) prices and the shortage of wood chips in the Pacific region. Prices peaked in early 2019 when demand for wood fiber in China and Japan was high and supply of wood chips from Australia and South Africa tightened. However, since their peak three years ago, prices have trended lower and averaged $135/odmt (FOB) in 1Q/22 for woodchips shipped to Asia . This level was below their 10-year average. At the beginning of 2022, export prices in Uruguay were around $25/odmt higher than in Brazil and Chile (see graph).
Are you interested in the Global Wood Products Market? The Wood Resource Quarterly (WRQ) is a 75-page report compiled in 1988 and has subscribers in over 30 countries. The publication tracks sawlog, pulpwood, lumber and pellet prices and reports on timber trade and market developments in most key regions of the world. For more information on the latest trends in the international forest products market, visit www.WoodPrices.com.