Wood market concerns

Taking into consideration existing commodities on the international market and its data available from the last 35 years, we realize that the foresting and wood products sector has had its performance exceeded only by the oil industry. As it is widely known, however, mankind lacks wise and responsible attitudes in both areas, and we are seeking the sustainable use of the planet’s available resources. This is a vital requirement for life.

Focusing just on the agricultural commodities sector background, we notice its behavior has been irregular. Some commodities (such as coffee, cacao, cotton and corn) have been devaluated, others (as soy and beef cattle) have been valued only a little and very few (as orange juice and wood) have shown good performance. The wood sector has overcome the orange juice performance and, among all wood types, noble wood is the one which has best performed.

In the American stock exchange market, major companies that have dedicated themselves to the wood or foresting sectors in the last ten years have been, when compared with the Dow Jones Index (that had an average valuation of 50%), with no exceptions, best valued. The sector average valuation was of about 200%.

It is important to highlight that they are long-run investment companies and produce basically pines. Deltic Timber Corporation, for example, holds about 180 thousand hectares planted alone (86% forested with pine and the remaining area is of natural forests), its trees age range from 10 to 20 years in average and it carries out researches seeking a genetic upgrade to make a better use of its investment.

This long-run driven attitude is almost non-existent in Brazil. Comparing to pine, it takes “Guanandi” less time to develop in here, it is worth more and has a lower production cost. Over there, people profit from planting trees that take a long time to grow, at higher costs and lower market price.