Export data, extracted from the ComexStat platform, the Ministry of Industry, Foreign Trade and Services, teak lumber, plywood and two types of sawn timber of other species show a reduction in the volume and price of wood products exported from Brazil.

The reduction of 12% in volume and 21% in value is a reflection of a market downturn that tends to return to pre-pandemic levels. According to WoodFlow CEO Gustavo Milazzo, who has more than 20 years of experience in foreign timber trade, the years 2020 and 2021 were extremely atypical. "The pandemic created a demand that factories in Brazil, and in the world, were not ready to meet and with that, 2021 was one of the best in history in terms of demand and prices," he explained.

However, Gustavo pointed out, this unusual high eventually created an extremely expensive market in all aspects: logistics, raw materials, services and the entire chain suffered from price inflation due to the lack of virtually everything. "In 2022 this market began to adjust. Demand fell, inventories were supplied and, with inflation still high worldwide, the market reaction was to hold on to new purchases."

The WoodFlow CEO estimates that this adjustment period should extend through the middle of 2023. For, 2022 ended with low prices and low demand on virtually all wood products. The new year began with a lot of uncertainty and buyers act with even more caution. "We are at a time where international prices are below the cost of production in Brazil. Many factories have reduced production expecting an improvement in international price or rising costs. But until we reach again this balance between supply and demand, combined with the normal market adjustment situation, we have many uncertainties that can change everything quickly. Among them the war in Ukraine and the advance of Covid in China", detailed Gustavo.

Source: Agrolink