Summary
• Brazil is still struggling to break the chain of illegal logging.
• Ipé remains popular but volumes could be down this year.
• Demand for certified hardwood products is increasing.

Most tropical timber traders are likely to tell you that Brazil is not the easiest place to do business.

Weather, strikes, crackdowns on illegal logging, logistics issues and demand from other markets all play a role in price and availability.

“People have a tendency to forget about the seasons,” said Rio Grande do Sul-based buyers’ agent Curtis Stanton. “It’s the rainy season, so there is less hardwood decking available. We hope there will be more at the end of the rainy season in July/August.”

Mr Stanton said two other current issues are government cuts in logging approvals, which have “a considerable influence on prices”, and the appreciation of the Brazilian real against the dollar (over 30% in the past 18 months).

At the same time, say traders, despite the market obstacles, the Brazilian forest sector still offers commercial opportunities worth exploring, not to mention a wealth of prime species, including some lesser known varieties that are being given a stronger market push.

Species

Ipé, said Mr Stanton, was still a firm favourite for its many attributes, including durability and stability. He also deals with ituaba for Continental Europe, and massaranduba and tatajuba.

Another Brazilian trader, a large company supplying mostly the US and China, said European business was “important”, as the region was a traditional buyer of Brazilian timbers.

“We in particular don’t do much with the UK but we aim to change this. What we can say is that ipé will have a slight slump in volume as producers didn’t stock much of this species. This will remain the case up to next season, in August, when new logs start to show up. Prices are fairly stable, except for ipé. So each order is a separate deal – there is not a fixed price or a market price for ipé.”

The trader also deals in angelim amargoso, tatajuba and angelim pedra for decking, although these species “are not huge in Europe”. “There’s plenty of volume in Brazil but not enough demand from Europe where species are not well known.”

Demand for certified timber

“There are more enquiries for certified FSC timbers. Sooner or later volumes will rise, but there will be a tiny offer since we can count the number of certified forest operations on the fingers of one hand.”

London-based agent Mike Bekin, of Ecochoice Ltd, reported good steady demand for ipé in the domestic sector and the equally dense, but less expensive, massaranduba for commercial work, with decking the main application. Ecochoice is trying to win customers over to alternative species with similar characteristics to relieve pressure on forest resources and maintain supply levels. “It’s a constant battle to get people to open their minds to new species.”

Mr Bekin said garapa was proving a cheap decking alternative, while tanimbuca – “poor man’s ipé” or “false ipé” – was another cost-effective option. Angelim is being used for heavy construction and water-related work and other interesting Brazilian timbers for external joinery work, such as benches, include Tigerwood, purpleheart and uxi.

Mr Bekin does not think the credit crisis will have much effect on Brazilian hardwood business because the luxury products sector “should still stand up well”. He forecast “constant rising in prices” and more demand for FSC-certified timber, though some customers flirting with buying certified stock will shy away for price reasons.

Changing attitudes

FSC Brazil executive director Ana Yang gave TTJ a unique perspective on the country’s forest sector. “The whole forest sector in Brazil is going through a paradigm shift – conversion from predatory logging practices into something more responsible.”

She said deforestation rates had recently increased and alluded to the “vicious circle” of illegal logging, agriculture and cattle ranching. “The problem is really about land use. There is no clarity of ownership on about 50% of land in the Amazon and illegal loggers are taking advantage of the confusion.”

Limited law enforcement remained a problem, she said, but pointed to the government’s new forest concession scheme, which includes incentives to move towards certification, as a more positive development. Today there are 2.8 million ha of FSC-certified forests in Brazil.

“In the next few years there will be an increase in certification. It’s important that the consumer in Europe and in Brazil is pushing for FSC-certified timber,” siad Ms Yang. “FSC certification and responsible forest management are increasing in Brazil. A few years ago it was niche but today the FSC label is on a lot of products. Brazilian manufacturers are starting to become more aware.”

The most recent International Tropical Timber Organisation market report confirmed a fall in Brazil’s tropical sawnwood export volume in February – 112,500m³ (down 9.8% on a year ago) – but value grew 10.6% to US$51.3m. The increased value can be partly explained by growth of added-value products and price adjustments to compensate for the depreciating dollar against the real.