Overview

South America (SA) ranks 4th both in regional share of world forest products consumption and industrial roundwood production.

S. America imports forest products mainly from N. America, while its exports are more mixed, going to Europe, N. America, Asia and other parts of S. America.

S. America's forestry sector is noted for its remarkable success in plantation forestry. There are 18 million acres of plantation timber in SA--mainly pines for the solid wood industry and eucalyptus for pulp and paper.



Exports from this region--especially Brazil and Chile--have grown dramatically, particularly into the U.S. softwood market.



Chile

Chile is attractive as a fiber resource base and supplier of wood products. It has fast growing plantations, a reputation for consistent quality shipments and low land costs relative to other regions.

Chile is S. America's most export-oriented forest industry. Pulp and paper is the most important sector, but sawmills consume the majority of roundwood.

In 1997, most of Chile's exports were destined for Asia (30%), Europe (20%), or other South American countries (17%).

However, by 1998, the United States became the single largest destination for Chilean forest products, reaching $358 million in exports. Japan was second, with $253 million, and Belgium third, with $122 million.



The Asian economic crisis hit export-driven Chile hard, given that Japan accounted for 15% of Chilean forestry exports, and 86% of woodchip exports.

As a result, Chile redirected it exports to the U.S., the only major economy that was going strong. Chilean companies are increasingly looking towards diversifying its exports to the U.S.

Most US purchases are of value added products such as mouldings, shop lumber, and furniture.

Chile's wood furniture segment is very promising. Secondary products exports rose 20% in 1998. Exports of finished products will reach $200 million by 2000.

Chile sells designer furniture to the US and Europe, office and kitchen furniture to S. America, and furniture parts to Asia. Radiata pine and Lenga, a native species, are used.

Brazil

Brazil is S. America's largest economy and forest industry. It has invested heavily in pine plantations for lumber and panels, and eucalyptus for pulp. Because Brazil's domestic economy is large, exports tend to suffer when domestic demand is high.

Brazil is a major exporter of planted southern pines (taeda, loblolly), exporting mainly to N. America.

In 1990, Brazilian pine lumber exports to the US was only 100,000m3. Today it has reached 600,000 m3 per year; greater than exports of native tropical hardwoods.

Brazilian and Chilean exports to the US largely go to the moulding and millwork industry. Exports of moulding and millwork to the U.S. have grown exponentially, replacing domestic ponderosa pine.


Source: Crows Publications

Trends

Chile's fiber availability will double by 2020. Other countries, such as Argentina and Uruguay, will become important in the next 10-15 years, as they have invested heavily in plantations.

S. American exports are expected to grow, as plantations in Brazil and Chile reach maturity. Coupled with supplies from New Zealand, there will be a problems with finding sufficient markets for this fiber. Softwood producers such as Canada and the US will face increasing competition from S. American suppliers.

The industry will move more into value-added processing. The log and lumber markets will give way to woodbased panel production, especially MDF and OSB, which can take advantage of small diameter logs.

Pulp and paper companies, such as Klabin, and Aracruz, will enter the solid wood market, finding new uses for its eucalyptus plantations. The solid wood eucalyptus market will develop over the next 5-10 years, primarily in furniture applications.

Source: FAO Yearbook of Forest Products