Released on: April 23, 2008, 11:18 pm

Press Release Author: Hakan Ekstrom

Industry: Marketing

Press Release Summary: The export-dependent sawmilling industry in Brazil has been
cutting back production in 2007 as shipments to the US fell.The Brazilian currency
continued to strengthen against the US dollar in the 4Q, making it increasingly
difficult for sawmills and plywood mills to export and compete in an already weak
market in the US.

Press Release Body: Seattle, April 24, 2008 -- The export-dependent sawmilling
industry in Brazil has been cutting back production in 2007 as shipments to the US
fell. With the reduced operating rates, demand for sawlogs declined and timber
prices leveled off in the local currency in the 4Q, according to the market report
Wood Resource Quarterly. However, with the strengthening of the Brazilian Real, wood
costs continued up to a record high in US dollars terms.

The Brazilian currency continued to strengthen against the US dollar in the 4Q,
making it increasingly difficult for sawmills and plywood mills to export and
compete in an already weak market in the US. Lumber exports to the US fell 25% in
2007 as compared to 2006, and this year is not going to be any better due to the
continued sluggish economy in the US. Because the export market looks dismal,
Brazilian sawmills are instead turning to the domestic construction market, which
looks quite promising for 2008.

With the reduced production of lumber, pine sawlog prices have flattened out in Real
terms last fall. However, as the US dollar has weakened, average sawlog costs moved
up, reaching a record high of US$70/m3 in the 4Q, according to the Wood Resource
Quarterly (WRQ). Wood costs for sawmills in Brazil are now higher than in many
markets in North America. As a result of a weakening US dollar and increased
domestic demand for sawlogs in Brazil the past few years, sawlog prices in 2007 were
over three times higher than in 2003.

The weaker demand for sawlogs is expected to continue in the coming months with
downward pressure on sawlog prices. In Southern Brazil, where a majority of the pine
plantations are located, there are some forest companies that are now selling
sawlog-size timber to the pulpmills as they pay higher prices than sawmills do.
Global pulpwood and sawlog market updates are included in the 50-page publication
Wood Resource Resource. The report, established in 1988, also includes regular
updates of pulp, lumber and biomass markets and has readers in over 20 countries.
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Contact Information:
Hakan Ekstrom
Wood Resources International
Seattle, USA
+44 222 656
info@wri-ltd.com
http://www.woodprices.com

Web Site: http://www.woodprices.com

Contact Details: Hakan Ekstrom
Wood Resources International
Seattle, USA
+44 222 656
info@wri-ltd.com
http://www.woodprices.com