According to the Brazilian Institute of Geography and Statistics (IBGE), the inflation rate was higher than expected in December 2012.
The December Consumer Price Index (IPCA), at 0.79%, was the highest since March 2011. The December 2012 figure was the highest rate for a month of December since 2004.
Despite the spike in December inflation the Government reached its inflation control target for 2012, stipulated at 4.5% with a variation of two percentage points. In 2011, the inflation rate was 6.5%.

Further weakening of the Real against the US dollar
In 2012, the average real/US dollar exchange rate was BRL 1.95/USD. In 2011 the average was BRL 1.67/USD.
The average exchange rate in December 2012 came in at BRL 2.08/USD indicating a slight easing of the Brazilian currency against the US dollar.

Reduction in interest rate possible in second quarter
The Monetary Policy Committee (Copom) of the Central Bank (BC), in its last final meeting of 2012 and in the first meeting of 2013, decided to maintain the prime interest rate (Selic) at 7.25% per year.
Many financial analysts are of the opinio that the Selic rate should be maintained at its current level, at least during the first quarter of this year and that a reduction to 7% could be considered for the second quarter if the economy does not show signs of recovery.

Promoting investment in plantations not bonds
Investing in land and forest plantations is being promoted as an alternative investment in Brazil. Investment companies claim that yields on investment in Brazilian plantations in 2012 would have yielded better returns than on gold or US saving bonds.
Several companies are offering plantation land as an alternative investment. Investors can purchase plantation packages for as little as euro 6.200 to 500,000. The return on such an investment is only seen when the plantations mature and are harvested.
Brazilian entrepreneurs are optimistic that demand for wood products in the domestic and international markets will continue to grow.
The hosting of the Olympic Games and World Cup will involve considerable investment in construction leading to increased demand for wood products say analysts. Also, the Brazilian government is promoting building of more housing for low income families which will increase demand for wood products.

Demand for hardwood planting stock expected to rise
In 2012 the demand for seedlings of high value hardwood species for plantations exceeded expectations. Projections for 2013 anticipate a tripling of demand according to Tropical Flora Reflorestadora, a specialist company providing planting stock.
Investment in the so-called ‘green economy’ is now being actively promoted and workshops have been organised by Tropical Flora to provide information on the potential of this type of investment.
Currently, the hardwood species that have been planted include Guanandi (Calophyllum brasiliense), African mahogany (Khaya ivorensis), Jequitibá Rosa (Cariniana legalis), Teak (Tectona grandis ) and Cana fístula (Peltophorum dubium).
Forestry experts say that farmers could plant such high value hardwoods alongside coffee, pupunha palm tree and other crops to generate higher income.

Round up of December 2012 timber exports
In December 2012,the value of wood products exports (except pulp and paper) fell 5.9% compared to values in December 2011, from US$ 218.6 million to US$ 205.7 million.
Pine sawnwood exports declined 30.4% in value in December 2012 compared to December 2011, from US$ 14.8 million to US$ 10.3 million. In terms of volume, exports dropped from 66,100 cu.m to 46,000 cu.m over the period.
Exports of tropical sawnwood fell 26% in volume, from 44,700 cu.m in 2011 to 33,100 cu.m in December 2012 compared to December 2011, (from US$ 24.7 million to US$ 16.4 million).
Pine plywood exports rose 21% in value in December 2012 compared to December 2011, from US$ 26 million to US$ 31.5 million. The volume increased was just over 19% in December, from 71,600 cu.m to 85,500 cu.m.
Exports of tropical plywood fell from 5,200 cu.m in December 2011 to 5,100 cu.m in December 2012, an approximate 2% decline.
A much higher rate of decline was observed in the value of tropical plywood exports in December where a 22% fall was registered, (US$ 3.6 million to US$ 2.8 million).
Brazilian exports of wooden furniture dropped from US$ 44.3 million in December 2011 to US$ 41.1 million in December 2012, a 7% decline.

“Orchestra Brazil” diversifies furniture export markets
A project called “Orchestra Brazil” is promoting diversification of export markets. This project is a partnership between Sindmóveis (Association of Furniture Industries of Bento Gonçalves) and Apex-Brazil (Brazilian Trade and Investment Promotion Agency).
The aim of “Orchestra Brazil” is to improve the competitiveness of Brazilian furniture exporters . This is being achieved through combining the expertise from manufacturers, suppliers, technologists and designers to the furniture sector. The target markets for this initiative are Peru, Paraguay, Uruguay and Argentina.
From 2005 – 2011 the annual import growth of companies associated with the “Orchestra Brazil” initiative in the four target markets was over 15% in Peru; 26% in Paraguay; 13% in Uruguay and 15% in Argentina. Research has concluded that this project was highly regarded in Peru, Paraguay and Uruguay.
Despite the declining imports by Argentina of furniture from Brazil, the result of barriers affecting bilateral trade say analysts, the country was the second largest importer of furniture from companies associated with the “Orchestra Brazil” initiative.

Brazilian sawmilling sector anticipates positive growth
The Brazilian sawnwood industry is forecasting positive growth in 2013 in anticipation of increased demand resulting from construction of facilities for the World Cup (2014) and the Olympic Games (2016). A further boost to demand will come from the government’s housing programme “My House My Life (Minha Casa Minha Vida)”.
In other encouraging news the Brazilian Association of Mechanically Processed Timber Industries (ABIMCI) has indicated that the federal government intends to reduce payroll taxes for the sawnwood sector in 2013.
The Ministry of Development, Industry and Foreign Trade (MDIC) is said to be considering eliminating the tax on Industrialized Products (IPI) for plywood and also the 8% tax charged when the Brazilian forest products are exported to the US market.

Domestic Log Prices

 Sawnwood Prices

 Veneer Prices

 Plywood Prices

Export Prices For Other Panel Products

Export Prices For Added Value Products