Eucalyptus becomes increasingly valuable commodity

The price of Brazilian Eucalyptus has risen 25 per cent in the past year, bringing it nearly level with the global average hardwood fibre price index.

A steady balance of supply and demand for logs of the commodity has resulted in a stable value in the local currency, the Brazilian Real. A steady strengthening in the currency, however, has resulted in the rising dollar costs.

The rise is a sure sign of how the Brazilian timber economy has progressed over the past five years. In 2006, the timber-rich nation had some of the lowest wood fibre costs in the world, but the appreciation of the Real against the dollar has brought prices close to the global average – more than 60 per cent higher than the 2006 prices.

As well as being in demand with pulp and panel manufacturers – which consume around 45 per cent of harvested eucalyptus logs – the wood is significantly gaining in popularity in the construction market, with sawmills producing lumber from both pine and eucalyptus. The increased demand has seen the area of eucalyptus plantations expand by more than seven per cent annually, the additional supply from which will likely see the stumpage prices remain level for the next few years.