Will the wave of imports continue in 2011 in Brazil?

By Patricia Perez Thu, Jan 06, 2011

The Brazilian Real reached its highest level relative to the US dollar since September 2008 at 1.65 Real/USD during this first week of 2011. Over the past few years, the uncertainty surrounding the increasing value of the Real relative to the US dollar has been a concern for players in the pulp and paper industry. For them, the appreciation of the local currency means reduced competitiveness and lower revenues from exports, as well as increasing paper imports that are tightening competition for domestic producers.

This situation is related to US dollar weakness and is not affecting just the Real. While relatively high commodity prices, high interest rates, large capital inflows and stability in the political environment are also responsible for the strength of the Real, but all emerging markets are facing these same problems with their currencies at the moment.

In 2010, the increased exchange rate along with Brazilian internal consumption growth prompted a wave of import growth. Customs data show that from January to November of 2010 paper imports rocketed 40.9% to 1.4 million tonnes compared to the year-ago period. Printing and writing paper imports were the main driver for the increase, with 670,000 tonnes in the period, a 47.3% climb over last year's levels. Newsprint registered 31.5% growth to 430,000 tonnes, while packaging, wrapping and boxboard paper imports surged 37.7% to 95,000 tonnes.

This is an excerpt from a full story that is available in RISI's Pulp & Paper News Service

Patricia Perez, Economist, Latin American Pulp & Paper, works out of RISI's São Paulo office, Tel: +55 11 3848-9051


All PPI publications and websites, including are copyrighted. Redistributing content or sharing user names are prohibited by law in virtually every country around the world and may subject you to fines. More detail on terms of use.