MARKET PRICES (2017)

Charcoal buyers are now not entering the region to purchase charcoal due to the reduced demand. As such the market for charcoal does not exsist.

In 2009 it was reported independently by LEF that within the city of Barreiras, the three largest wood consumers; Bunge, Galvani and Cargill, were purchasing energy wood delivered at the factory gate at a rate of R$78.65 per cubic meter as shown in the background section of this website.

Prior to harvesting GWD Forestry commissioned an independent report to be completed in order to provide unbiassed information in relation to current wood prices, at the time of the report it was shown due to an increased supply of eucalyptus wood in the region and contractions in the marketplace, these same sources were now offering on a limited basis to purchase energy wood at a rate of R$63.00 per cubic meter delivered to the factory gate representing a drop of approximately 20% in comparison to those prices reported independently by LEF at the start of the project in 2009.

Moving closer into 2018 it is apparent that local markets have contracted further with the announcement that one of the 3 largest wood consumers in the region (Cargill) has entered into a supply agreement with Energia Florestal owners of plantations part financed through Cargill and will be purchasing energy logs from them until at least 2020.

Due to the current conditions wood prices have fallen steeply over the last few months within the domestic market this is partly due to reduced demand from the pig iron producers, alongside an increased supply of timber within the region due to the prolonged drought conditions that have affected a number of producers resulting in an increase in harvesting operations within the region.

Currently as the 2017 – 2018 harvest season commences those prices being achieved as directed by IFPU holders is below those prices projected in 2009both by the company and by third party professionals with average prices achieved ranging at between R$25 – R$30 per cubic meter . As such and due to current domestic market conditions it is recommended that export markets be the focus for future harvests where possible.

INDEPENDENT WOOD PRICE REPORT

Prior to harvest notifications being sent GWD Forestry commissioned the independent wood price report viewable below; moving further into 2018 wood prices are expected to continue to fall due to the current influx of wood within the region and reduced demand.

SALES VALUES RECEIVED

The image below shows the prices received for 360m3 of timber. The payment received totals R$10,075 or approximately R$27.99 per cubic meter of cut wood picked up from the farm sites. The prices received locally by GWD Floresta Ltda are therefore substantially below those prices expected at the start of the project and are a result of the current market conditions.

GWD Forestry, Greenwood management