At the recently concluded International Timber Trade Federation Day (Oct 2009, Geneva) Marco Tuoto of STCP Brazil, discussed the challenges facing the Brazilian
timber sector.

This outlined Brazil’s resource base, trends in production and trade and issues of legality verification and the implications for the Brazilian timber sector. The presentation identified the global and domestic factors responsible for the declining exports of which the appreciation of the Brazilian currency against the US dollar and falling consumption in the main markets.

Furniture sector closures
Furniture manufacturers in Santa Catarina have been reducing their labour force as exports have plummeted because of falling demand in export markets and because
of the appreciation of the Brazilian Real.

Many companies have been reducing the payroll and some mills have decided to close until the markets pick up. Reports indicate that there was around a 30% cut in the work force in the furniture industries in the region.

Analysts point out that the raw materials and even machinery are Brazilian-made and costs in dollar terms have been rising sharply. In addition the industry is labour
intensive so job losses are high.

One of the greatest difficulties faced by exporters is that of pricing forward sales when the currency is appreciating so fast. In many cases over the past year exporters have had to absorb the losses from exchange rate fluctuations as contract prices could not be increased with the overseas buyers.

Action on Argentina import rules On November 1st Brazil’s Minister of Development
Industry and Trade, reportedly confirmed that the government is applying ‘non automatic’ license requirements for some imports from Argentina. These measures are similar to those measures adopted by Argentina some twelve months ago.