Jun 16, 2010

Lumber Extracted from Amazon Region Halved in Ten Years

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The amount of lumber extracted from the Brazilian Lowland Amazon Region fell by half between 1998 and 2009 from 28.3 million cubic meters per year to 14.2 million cubic meters per year. The decline is attributed to several factors including: the substitution of eucalyptus for native hardwoods, increased monitoring and enforcement of environmental laws, and lower demand due to the worldwide economic slowdown.

These estimates were part of a study released last week by the Brazilian forestry Service (SBF). The report also indicated that 80% of the Amazon lumber was used in domestic construction especially in the city of Sao Paulo as well as other large cities in southeastern Brazil. Over the last several decades, eucalyptus plantations have been grown extensively throughout Brazil. Eucalyptus wood is now used widely in paper production, furniture, home construction, and as a source of fuel especially for industrial furnaces. The increased use of eucalyptus has helped to hold down the demand for native hardwood from the Amazon.

According to Antonio Carlos Hummel, the director of the Brazilian Forestry Service, the amount of illegal deforestation has also been reduced through increased enforcement of environmental laws. Increased use of physical monitoring in the field and at the hundreds of sawmills operating in the Amazon Region has allowed officials to detect sources of illegal logging. The real advantage though has come from the increased use of GPS and satellite monitoring that allows officials to pear into regions where ground monitoring is nearly impossible.

The Brazilian government has launched a program that is designed to monitor thousands of cattle ranches and row crop farmers on the eastern and southern edge of the Amazon Region. These farming operations are monitored through frequent satellite photos that can detect illegal logging operations. If identified, the rancher or farmer will be fined and the production from the ranch or farm will not be allowed to be sold. The program was started in 2009 and it is expected to be fully operational within a few years. Where it has already been implemented, illegal land clearing has been reduced as much as 70%.

Since 80% of the Amazon lumber is used in domestic construction, the recent downturn in economic activity has reduced the demand for lumber and thus reduced the amount of logging. As economic activity returns more normal levels, it is expected that logging activity will increase as well.

Of the major states in the Amazon Region, 43% of the lumber receipts are from the state of Para, Mato Grosso is second with 33% of the lumber receipts, followed by Rondonia at 13%.