Forest products exported from Brazil and Chile fell 26% during the first half of 2020, with wood pulp being the product that declined the most
Latin America’s two large economies, Brazil and Chile, have taken large hits during the COVID-19 epidemic in 2020, with the GDPs forecasted to contract by 5.5% and 4.5%,respectively. The gloomy market conditions worldwide impacted the exportation of forest products from Latin America negatively during the first half of the year, less in terms of volume than in value. With prices for many forest products trailing in the world markets in 2020, the total export values (in US dollars) of forest products from Brazil and Chile, including wood chips, logs, lumber, and pulp, fell by 26%, from almost 3.4 billion dollars in the 2Q/19 to about 2.5 billion dollars in the 2Q/20. The most significant decline was that of the primary export product, wood pulp, which decreased by 32%.
The average export price for pulp in Brazil fell about 30% from the 2Q/19 to the 2Q/20 in US dollar terms, but thanks to the weakening Brazilian Real, the price was only down four percent in the local currency (for the latest trade data, see the WRQ).
Hardwood chips is the only forest product that has not experienced a substantial decline in export values so far during the coronavirus epidemic. Average export prices for Chile and Uruguay during the first half of 2020 were actually up two percent y-o-y, while declining slightly they had a small decline in Brazil over the same period. The volume-weighted Latin America Wood Chip Export Price Index remained practically unchanged at US$156/odmt in the 1H/20, as compared to the 1H/19. The only significant decline in wood chip shipments from Latin America during the first six months of 2020 was in the exportation of wood chips from Uruguay to Portugal, which fell over 50% y-o-y.
The primary export product from Uruguay is hardwood pulp. The country also exported smaller volumes of softwood logs and hardwood chips. Although the shipped pulp volume was only slightly lower in the first half of 2020 compared to the same period in 2019, the total export value fell 42% to 600 million dollars in 2020.
Early reports for the 3Q/20 indicate that pulp exports continued to decline q-o-q, not only from Uruguay but also from Brazil and Chile.
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