ITTO MARKET DISCUSSION
Ivan Tomaselli
www.stcp.com.br
Libreville - Gabon | November, 2013
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CONTENTS

FORESTS AND RAW MATERIAL SUPPLY
 INDUSTRIAL DEVELOPMENTS
 MARKETS AND TRADE
 PERSPECTIVES
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FORESTS AND RAW MATERIAL SUPPLY
3
FORESTS AND RAW MATERIAL SUPPLY
BRAZIL (2012)
- 8 million sq. km
- 60% Forests
4.5 million sq. km
PLANTATIONS
- 7 million ha
- 1% country area
- 90% pine/eucalyptus
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FORESTS AND RAW MATERIAL SUPPLY
BRAZIL (2012)
TROPICAL TIMBER
(Natural Forest)
- 52 million m³/year
PLANTATIONS TIMBER
(pine and eucalyptus)
- 178 million m³/year
Source: IBGE 2013, compiled by STCP
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FORESTS AND RAW MATERIAL SUPPLY
Production (million m³)
250
LOG PRODUCTION
BRAZIL
200
150
100
50
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
Plantation
Natural Forests
Annual Growth Rate
Source: IBGE 2013, compiled by STCP
Natural Forest
- 6% / year
Plantation
+ 5% / year
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INDUSTRIAL DEVELOPMENTS
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INDUSTRIAL DEVELOPMENTS
 HISTORY OF FOREST SECTOR
1500-1800
1800-1900
1900-1960
1960-1900
1980-...
• Log Exports
Colonial Period
• Timber Imports
USA/Finland/Canada
• Araucária (Parana Pine) Industry
Lumber/Plywood/Pulp
• Tropical Timber Industry
Lumber/Plywood
• Plantation Timber / Based Industry
Pulp/Lumber/
Wood Panels
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INDUSTRIAL DEVELOPMENTS
 CURRENT PRODUCTION (2012)
LUMBER
- Natural Forest (Tropical)
6.0
million m³
- Plantation
9.2
million m³
- Natural Forest (Tropical)
480
thousand m³
- Plantation
2.1
million m³
7.3
million m³
14.0
million tons
PLYWOOD
RECONSTITUTED PANELS (MDF/Particle Boad/Hardboard)
- Plantation
PULP
- Plantation
Global Ranking
Source: ABIMCI, IBGE, FAO (2013), compiled by STCP
MDF
Pulp
Eucalyptus Pulp
3º
4º
1º
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MARKETS AND TRADE
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MARKETS AND TRADE
PRODUCT
MARKET SHARE (2012)
DOMESTIC
INTERNATIONAL
- Tropical
94%
6%
- Conifer (plantation)
92%
8%
- Tropical
88%
12%
- Conifer (plantation)
53%
47%
RECONSTITUTED PANELS (plantation)
98%
2%
PULP (plantation)
42%
58%
LUMBER
PLYWOOD
Source: ABIMCI, MDIC (2013), compiled by STCP
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MARKETS AND TRADE
 MARKET TRENDS
544
571
670
500
400
194
380
238
452
264
530
957
257
537
1,581
1,543
1,894
1,556
1,756
477
307 304
1,318
700
600
332
1,109
Unit Value
(2012)
US$ 511/m³
800
579
393
1,104
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Volume ↓ x Unit Value ↑
Unit Value
(2000)
US$ 278/m³
300
200
US$ mmillion
Thousand m³
- Tropical Lumber Exports
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Volume (thousand m³)
Source: ABIMCI (2013), compiled by STCP
Value (US$ million)
Volume declined 76% in the last 10 years
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MARKETS AND TRADE
 MARKET TRENDS
- Tropical Lumber Export Price
1,400
US$/m³ FOB
1,200
Jatoba (Green)
Cambara KD
Angelim Pedra (Green)
1,000
800
600
400
200
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: STCP Database.
Prices increased in the last 10 years:
- Jatoba
148%
- Cambara
70%
- Angelim Pedra
216%
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MARKETS AND TRADE
 MARKET TRENDS
- Tropical Plywood Export
250
200
155
150
36
100
50
58
46
75
58
101
252
65
116
0
391
825
207
454
200
747
663
632
600
400
213
228
731
204
300
US$ million
Thousand m³
246
218
400
350
276
1,000
800
Unit Value
(2012)
US$ 622/m³
373
1,003
1,200
Volume ↓ x Unit Value ↑
Unit Value
(2000)
US$ 344/m³
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Volume (thousand m³)
Value (US$ million)
Volume declined 93% in the last 10 years
Source: ABIMCI (2013), compiled by STCP
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MARKETS AND TRADE
 DECLINE IN EXPORTS OF TROPICAL TIMBER PRODUCTS IS A
GLOBAL TREND
% Period Growth Rate (2008-2012)
- Tropical Lumber Export Volume (2008-2012)
60.0
Peru
Brasil
Malasia
Bolivia
Producers
ITTO Total
Total
34.6
40.0
20.0
0.0
-20.0
-15.0
-9.1
-10.3
-40.0
-60.0
-80.0
-50.1
-74.9
-100.0
Source: ITTO (2012), compiled by STCP
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MARKETS AND TRADE
 DECLINE IN EXPORTS OF TROPICAL TIMBER PRODUCTS IS A
GLOBAL TREND
% Period Growth Rate (2008-2012)
- Tropical Plywood Export Volume (2008-2012)
10.0
0.0
-10.0
-20.0
-30.0
-40.0
-50.0
-60.0
-70.0
-80.0
Bolivia
Brasil
Peru
Indonesia
Malasya
Latin
America/
Caribbean
1.5
-18.7
-52.4
-75.0
Source: ITTO (2012), compiled by STCP
-57.6
-70.1
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PERSPECTIVES
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PERSPECTIVES
 TRADE IS EXPECTED TO CONTINUE TO DECLINE…
The international trade of tropical timber products has been affected by:
-
Competition with other timber products (plantations);
Development of new competitive products and finishing materials;
Increase in the logistics costs for tropical timber;
Increase in transaction costs (local and international- EU FLEFT, United States’
Lacey Act, Australia’s Illegal Logging Act, etc);
Market access: barriers and impediments;
Lack of market promotion and product image
Reduction and restrictions on supply;
Lack of investments on technology developments to increase competitiveness.
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PERSPECTIVES
 TROPICAL PLANTATION TIMBER IS AN ALTERNATIVE…
There are successful tropical plantations that can enhance competitiveness of
tropical timber products in the global
market
- Teak
- Acacia
- Eucalyptus
- African Mahogany
- Others
Efforts are needed to maintain competitiveness:
- Increase productivity of plantations and industrial operations
- Develop and improve products performance
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PERSPECTIVES
 TO ENSURE THAT TROPICAL FORESTS ARE SUSTAINABLY MANAGED AND
TROPICAL TIMBER INDUSTRY CONTINUE TO CONTRIBUTE TO IMPROVE THE
SOCIAL-ECONOMIC CONDITIONS OF TROPICAL COUNTRIES IS FUNDAMENTAL A
GLOBAL COORDINATED EFFORT TO INCREASE THE COMPETITIVENESS OF
TROPICAL TIMBER PRODUCTS IN THE MARKET
It is important to consider:
- Reduction of transaction costs and market barriers / impediments
- Technology developments to improve use of resources and products
performance
- Market promotion to improve image
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PERSPECTIVES
 LEARNING FROM OTHERS
International Jute Study Group (IJSG) successor to the International Jute Organisation (IJO)
-The
www.jute.org
Objectives:
• To provide an effective framework for international cooperation, consultation and policy
development among members with regard to all relevant aspects of the world of jute economy;
•To promote the expansion of international trade in jute and jute products by maintaining existing
markets and by developing new markets, including the introduction of new jute products and the
development of new end-uses;
•To provide a forum for the active participation of the private sector in the development of the
jute sector;
•To address the issues of poverty alleviation, employment and development of human resources,
particularly women, in the jute sector;
•To facilitate the improvement of structural conditions in the jute sector through improvement of
productivity and quality, and promotion of the application of new processes and technologies;
•To create and increase awareness of the beneficial effects of the use of jute as an
environmentally friendly, renewable and biodegradable natural fibre;
•To improve market intelligence with a view to ensuring greater transparency in the international
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jute market in collaboration with other organizations, including the Food and
PERSPECTIVES
 LEARNING FROM OTHERS
-
The International Coffee Organization (established in 1963)
Private Sector Consultative Board
The Private Sector Consultative Board (PSCB) is an ICO body which provides a platform for the
representatives of private sector organizations of producing and consuming countries. Established in
1999, it consults with and advises the Council on issues relevant to the coffee sector, either on
request or on its own initiative.
The PSCB comprises 16 leading industry representatives from producing and consuming countries,
along with their alternates and advisers. It generally meets at the time of the International Coffee
Council meetings in March and September each year and its Chairperson reports to the Council on the
outcome of its meeting. At the meetings, PSCB representatives review a range of coffee issues
including sustainability initiatives, food safety aspects, quality and coffee and health.
The PSCB has agreed that its main mission and objective should be to increase the world coffee
market in value and volume. One of the constraints for increasing coffee consumption was the
misconception that coffee is bad for your health held by part of the population. On the contrary, there
is significant scientific information available on various positive health benefits associated with coffee
drinking.
www.ico.org
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PERSPECTIVES
WHY WE ARE WE MOVING
TO ANOTHER DIRECTION?
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THANK YOU !
Presentation available in
www.stcp.com.br
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