According to the Brazilian Institute of Geography and Statistics (IBGE), the rate of inflation increased in February but at a slower rate than the 0.86% rate recorded in January. The Monetary Policy Committee (Copom) of the Central Bank decided for the third consecutive time to maintain the current interest rate (Selic) at 7.5%.

At this level the interest rate is the lowest for many years and is the result of the gradual reductions in rate that began in August 2011 and continued for 10 months up to October last year. The average exchange BRL/US4 exchange rate in February was BRL 1.97/USD significantly down on the rate of BRL1.72/USD during February 2012.

Furniture sector bullish on prospects for 2013
The furniture sector in Brazil is optimistic about growth in 2013 both in terms of production and sales. The Institute of Study and Market Intelligence (IEMI) is projecting that industrial production, which expanded by 2% in 2012, is expected to register a 5.5% growth this year. The projected scenario for sales is also quite optimistic as 2013 could see an almost 10% increase in revenues compared to the 8% growth achieved in 2012 says the IEMI report.

A survey of Brazilian consumer furniture buying behaviour conducted by IEMI in 2012 reveals that the majority of survey respondents (41%) usually buy at least one item of furniture every year. Such purchases, says the report, are generally motivated by an event such as moving home (30%), children outgrowing current furniture (15%) and marriage (13%). Brazilian consumers spent an average of R$ 1,170 on furniture in 2012. In choosing furniture, 41% mentioned appearance as a main factor at the time of purchase, only 19% mentioned durability and strength. Manufacturers are aware that design is most important for consumers.

Sinop to have new industrial district for timber enterprises
The Timber Industry Association of Northern Mato Grosso (SINDUSMAD) recently met to identify the first steps required for creating a new timber industrial and commercial district in the Sinop municipality. The wood processing industries ideally need a dedicated area away from the residential parts of the city. The problem is that the city has expanded and the residential developments now surround the locations of the wood processing plants.

With over 220 wood companies in Sinop the area is facing environmental problems mainly the result of the constant movement of heavy vehicles transporting wood products. It has been identified that these problems could be overcome by establishing a timber processing district outside the urban areas.

Mixed trends in February exports
In February 2013, the value of timber product exports (except pulp and paper) fell 1.6% compared to values in February 2012, from US$189.7 million to US$186.6 million. Pine sawnwood exports dropped 1.6% in value in February 2013 compared to the same month in 2012, from US$12.9 million to US$12.7 million. In volume terms, pine sawnwood exports declined 0.7% to 57,900 cu.m in the same period.

Export volumes of tropical sawnwood fell sharply by almost 20% from 34,300 cu.m in February 2012 to 27,700 cu.m in February this year. The value of exports fell 14.6% from US$ 17.8 million to US$ 15.2 million, over the same period. In contrast, the value of pine plywood exports increased 11.4% in February 2013 compared to February 2012, from US$27.1 million to US$ 30.2 million.

The volume of exports also increased and was up 11% over the same period from 73,000 cu.m to 81,100 cu.m. Exports of tropical plywood also increased from 2,500 cu.m in February 2012 to 4,500 cu.m in February 2013, representing an 80.0% increase. In term so value, a 47% increase in earnings was recorded from US$1.7 million to US$2.5 million over the twelve month period. The value of wooden furniture exports dropped from US$35.7 million in February 2012 to US$34.8 million in February 2013, a 2.5% decline

Rio Grande do Sul leads in furniture exports
The furniture sector of the state of Rio Grande do Sul has recovered from the weak international market over the past few years and began 2013 with positive results. Exports by manufacturers in the state in January amounted to US$11.86 mil. representing almost 27% of all Brazilian furniture exports. Rio Grande do Sul was the only Brazilian state that reported growth in furniture exports in 2012, thus maintaining its position as the top ranked exporter.

Although the state exported more furniture in January 2013, compared to January 2012 exports are still below record levels. The main destination for Brazilian furniture remains Argentina, followed by the United States and the United Kingdom. Colombian imports of Brazilian furniture have more than doubled compared levels in the same period last year. Expectations for 2013 are high according to the Association of Furniture Industries of the State of Rio Grande do Sul (MOVERGS). While trade during the early part of 2013 was still hampered by global economic weakness the situation is expected to improve this year.

35 Italian machinery suppliers participate in FIMMA Brazil 2013
Italy is the main supplier of woodworking machinery to Brazil and exports amounted to euro 52.3 million last year. Italian suppliers captured a market share of almost 36% of Brazilian demand for wood working machinery. Thirty-five Italian wood working machinery suppliers participated in the International Trade Fair for Machinery, Raw Materials and Accessories for the Furniture Industry (FIMMA Brazil 2013),
Italian exports of wood working machinery to Brazil are estimated at euro 52 mil. and companies in the states of Rio Grande do Sul and Santa Catarina were the main buyers, accounting for around 45% of all imports of woodworking machinery.

The Italian woodworking machinery sector ended 2012 with a turnover of euro1.53 bil., a significant value but 9.8% below the previous year. In contrast Brazilian imports of Italian wood working machinery rose about 10% in 2012.


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