Latest Market News

Brazil's cellulose sector to invest R105bn by 2028

  • Spanish Market: Agriculture, Biomass
  • 22/08/24

Brazil's paper and cellulose sector will invest R105bn ($18.9bn) to build new plants and logistics infrastructure as well as expand existing ones by 2028, Brazilian forestry industry (IBA) president Paulo Hartung said on Tuesday.

Multiple companies will invest, with some already doing so. Suzano will invest R15.9bn to build a plant with capacity to produce 2.55mn metric tonnes (t)/yr of eucalyptus-based cellulose. It will also spend R6.3bn in other initiatives, such as building logistical infrastructure and planting.

Chile's Arauco will invest R25bn to build its first cellulose plant in Brazil in 2028. The unit will have an initial production of 2.5mn t/yr and will double that by 2032. The project also foresees generation of 400MW of clean energy, which will ensure its energy self-sufficiency.

Another Chilean company, CMPC, will also invest R25bn to build a new industrial plant and a port terminal in Rio Grande do Sul state. The 2.5mn t/yr plant will produce bleached eucalyptus-based cellulose, which can be used to make different kinds of paper, packaging and hygiene products. It is also used some food items, medicines and cosmetics.

Eldorado Brasil will invest an additional R25bn to add a second production line in its Mato Grosso do Sul state operations and a railway to transport production.

Bracell — which is controlled by Singapore-based Royal Golden Eagle — will invest R5bn in a paper tissue plant, which will be installed next to its cellulose plant in Lencois Paulista, in Sao Paulo state. The firm disclosed neither plants' capacity.

Finally, Klabin — Brazil's largest producer of packaging paper and corrugated cardboard — also announced a R1.6bn investment, but did not detail how it will use that money.

Hartung's announcement came during a sector meeting with Brazilian President Luiz Inacio Lula da Silva and vice-president and trade minister Geraldo Alckmin.

"These investments are being made in areas of low economic activity," Hartung said, adding that the paper and cellulose sector is planting cultivated forests that are replacing unproductive pastures.

Brazil's paper and cellulose sector had 10mn hectares of productive planted areas in 2023, according to the federal government. The area to grow cellulose increased by 19pc in the first half of 2024 from the same period last year, it said, without giving a more recent figure.

Brazil is the largest exporter and second largest producer of cellulose, according to Alckmin. The 47 companies linked to IBA produced 25mn t of cellulose, 11mn t of paper and 8.5mn m³ of wood panels last year, according to IBA figures. Additionally, Brazil exported a record 19.1mn t of cellulose, the group said.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

11/10/24

Brazil's drought: Northern rivers continue to drop

Brazil's drought: Northern rivers continue to drop

Sao Paulo, 11 October (Argus) — The worst drought in Brazil's history continues to reduce river levels in the Northern Arc region, hampering navigation on rivers that are used as waterways and are important routes to transport grains and fertilizers. Madeira waterway The waterway links Rondonia state's capital Porto Velho to the Itacoatiara port, in Amazonas state. Itacoatiara port is expected to receive around 78,100 metric tonnes (t) of fertilizers in October, according to line-up data from shipping agency Unimar. Status: The situation is critical in Porto Velho on the Madeira waterway, the second largest in the northern region. The state's ports and waterways authority (Soph) halted operations on 23 September because the Madeira River registered the lowest water level since monitoring began in 1967. The Madeira River's depth in Porto Velho decreased to 24cm on 11 October, from 48cm on 2 October, according to monitoring data from the Brazilian Geological Survey (SGB). Navigation remains suspended in the port. Amazonas waterway It is the main waterway in Brazil's north, handling around 65pc of the region's cargo, according to the national transportation and infrastructure department (Dnit). It links Amazonas' capital Manaus to Para's capital Belem. Status: The Negro River has also been falling. The depth was at 12.25m at the SGB monitoring point in Manaus on 11 October, down from 12.89m on 2 October. This is an extreme drought level and below the historic low of 12.7m recorded in 121 years of monitoring. Tapajos waterway It is an important waterway to move product from Mato Grosso state's northern area, with the Santarem port, in Para state, as a destination. The Santarem port is expected to receive 90,976t of fertilizers in October, according to line-up data from Unimar. Status: The Tapajos-Teles Pires waterway is also facing a dire situation. The national water and sanitation agency ANA declared a water shortage on the Tapajos River on 23 September. Drier than usual weather has dropped the levels of Tapajos, especially in the stretch between Itaituba and Santarem cities, in Para state, where flows are below historic minimum levels. The depth of the Tapajos River at the Itaituba monitoring point, where the transfer point for the Miritituba waterway is located, was at 86cm on 11 October, from 87cm on 2 October and below the record low of 1.32m, according to SBG data. At the Santarem monitoring point, where the port of Santarem is located, the Tapajos River was at -6cm, a level considered dry. The level was 25cm on 2 October. The historic minimum at the location is -55cm below the port's reference point. A level below zero does not mean the river is dry, but a negative reading indicates very low conditions. Tocantins-Araguaia waterway The Tocantins-Araguaia waterway encompasses the Araguaia and Tocantins rivers. It runs from the Barra do Garcas city, in Mato Grosso, into the Araguaia River, or from Peixes city, in Tocantins state, into the Tocantins River, to the port of Vila do Conde, in Para state. Soybeans, corn, fertilizers, fuels, mineral oils and derivative products are transported via the northern waterways. Vila do Conde port is expected to receive 152,800t of fertilizer in October, according to Unimar. Status: The SGB has two monitoring points on the Araguaia River. In the Nova Crixas city, in Goias state, the river was at 2.84m on 11 October, from 2.87m on 2 October. The river remains below the historical level of 3.10m. In Sao Felix do Araguaia city, in Mato Grosso state, the river was at 2.54m, from 2.55m in the prior week, a situation of extreme drought and close to the historical minimum level of 2.51m. By João Petrini Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

USDA orders west African organic soy inspections


11/10/24
11/10/24

USDA orders west African organic soy inspections

St Louis, 11 October (Argus) — The US Department of Agriculture (USDA) is warning organic soybean importers that product from west Africa may pose risks to consumers and is directing organic certifiers to increase inspections and testing. USDA's National Organics Program (NOP) on 27 September issued a directive to certifiers of organic soybeans and soybean meal from west Africa requiring increase oversight of the organic soybean supply chain over concerns about a lack of adequate controls in the region. Organic certifiers in west Africa are being required to increase on-site inspections and expand sample testing of organic soy products. The certifiers also by 28 October must provide NOP with descriptions of their oversight practices, as NOP evaluates whether to expand its own surveillance. Regulators took action in response to "the rapid growth of soybeans represented as organic in the region, security concerns in the region that can impede the ability for certifiers to conduct unannounced inspections, the prevalence of producer groups with thousands of members and associated issues with full traceability, feasible yields and adequate internal control systems, and known attempts to sell nonorganic soybeans from the region as organic", according to the directive obtained by Argus. The directive also prohibits certifiers from issuing time-based NOP import certificates within the region. Time-based certificates allow for multiple shipments of organic products to be certified for export over a period of time, in contrast to non-time-based certificates which are specific to each shipment. The move comes in the wake of a sharp increase in US imports of organic soybeans and soybean meal from west Africa over the past two years. Organic certification within west Africa is relatively concentrated. According to the Organic Integrity Database, Ecocert SAS certifies over half of all organic operations in the region. The next most common certifier in the countries is the Control Union Certifications, which certifies about 33pc of operations. US reliance on west African organic soy supplies has ballooned in recent years. Through September 2024, 42pc of US organic soybean meal imports and 11pc of organic whole soybean imports were sourced from west African countries, according to Argus organic import data . Two years ago, west African countries accounting for only 3.6pc of US organic soybean meal imports. Regarding what impact this directive could have on organic soy markets, Jennifer Tucker, the deputy administrator of the USDA NOP, said that "in the past, directives have led to both certifier and operation surrenders and some changes in exports as fraud was removed from the system". But "buyers who have invested in and continue to do effective due diligence and oversight on their supply chains should not be affected," she said. By Ryan Koory and Rachel Nelson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Erex starts building two biomass plants in Vietnam


11/10/24
11/10/24

Erex starts building two biomass plants in Vietnam

Tokyo, 11 October (Argus) — Japanese renewable energy developer Erex has started building two 50MW biomass-fired power plants in Vietnam, the company said on 10 October. Erex started construction on 4 October in the Yen Bai and Tuyen Quang provinces of northern Vietnam. Each plant will have 50MW of generation capacity and burn around 500,000 t/yr of wood residue secured in northern Vietnam. Both plants are scheduled to come on line in mid-2027. Both projects are backed by Japan's subsidy scheme that supports potential projects that could contribute to its Joint Crediting Mechanism (JCM) to cut greenhouse gas emissions. The construction cost of each plant is estimated at $100mn-120mn, Erex said. Erex plans to start operations at the 20MW Hau Giang plant in December, which is its first biomass-fired power plant in Vietnam. The company aims to build up to 19 biomass-fired power plants and 20 wood pellet factories in Vietnam by mid-2030s. The company also runs biomass projects in Cambodia , aiming to construct up to five power plants. The company's profits from Vietnam and Cambodia are expected to grow rapidly and account for more than 70pc of its whole profits around 2030, the company said. By Takeshi Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia's GrainCorp workers may strike during harvest


11/10/24
11/10/24

Australia's GrainCorp workers may strike during harvest

Sydney, 11 October (Argus) — Union members working for Australian grain aggregator GrainCorp in New South Wales (NSW) state may strike in the coming weeks as part of a wage dispute that could disrupt the start of the winter crop harvest. Australia's Fair Work Commission (FWC) approved a ballot of workers represented by the Australia Workers' Union (AWU) on 9 October, with voting to close on 23 October. If members vote in favour of protected industrial action, legal strikes could take place. An AWU spokesperson confirmed at least 200 union members employed by GrainCorp would vote on proposed action including work stoppages and bans on loading and unloading grain onto trucks and trains. GrainCorp and AWU must engage in a compulsory conciliation conference on 18 October to try to reach an agreement on unresolved issues before any strikes can occur. "GrainCorp continues to negotiate in good faith with our employees and the AWU and has held 10 meetings with them in the last six months," a GrainCorp spokesperson said on 11 October. The firm said it was too early to assess the impact, if any, that industrial action would have on the harvest ahead of the conciliation and ballot outcome. But NSW Farmers Grains Committee chair on 11 October called on GrainCorp and AWU to come to an agreement before harvest, stressing the cost of delays during harvest. NSW is poised to have an exceptional winter harvest, thanks to favourable weather throughout the growing season. The Australian Bureau of Agricultural and Resource Economics and Sciences (Abares) projects winter crop production to increase by 50pc from 2023-24 to 16.9mn t in 2024-25, which would be the third-highest winter crop on record. GrainCorp handled 37.4mn t of grain in the fiscal year to 30 June 2023, which is greater than the combined winter crop production of Queensland, Victoria and NSW in July 2022-June 2023, according to Abares estimates. Grain Producers Australia did not respond immediately for comment. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Mexico’s Sep inflation slows with energy prices


10/10/24
10/10/24

Mexico’s Sep inflation slows with energy prices

Mexico City, 10 October (Argus) — Lower energy prices supported an easing in Mexico's consumer price index (CPI) in September for a second consecutive month. The CPI slowed to an annual 4.58pc in September, down from 4.99pc in August, Mexico's statistics agency Inegi said on 9 October. This was lower than both Mexican bank Banorte's own 4.59pc estimate and its analysts' consensus estimate of 4.61pc. Energy inflation eased for a second month, dropping to 6.9pc from 7.9pc in August and 9.2pc in July, with LPG prices — the largest component — slowing to 14.7pc in September from 16.8pc in August and 25.6pc in July. Seasonal rains, now ending, have largely reversed the price spikes in farm goods caused by extreme drought earlier this year, with fruit and vegetable inflation slowing to 7.65pc in September from 12.6pc in August, making it the first single-digit rate since November 2023. "Despite the positive performance of agricultural items since August, lingering risks could turn them negative again," Banorte said in a note, emphasizing that above-normal rainfall will be needed in the coming months to avoid a return to drought and price spikes next year. For now, Mexican weather agency Conagua still estimates relatively heavy rains in October, but "more adverse" conditions for November and December, with no state forecast to exceed the upper range of historical rainfall. Core inflation, which strips out volatile food and energy, eased in September to 3.9pc from 4pc, moving within the central bank's 2pc to 4pc target range for the first time since February 2021. Inside core, said Banorte, packaged and manufactured goods continue to improve, standing at 2.9pc from 3pc in August. Services also moderated, adjusting to 5.1pc from 5.2pc. "A downward trend in the latter is needed to corroborate additional gains for the core," Banorte said. "This will still take some time, especially given that the margin for additional declines in goods may be running out." The Mexican bank added that within this context, it maintains its estimate for full-year 2024 core inflation to hold to 3.9pc. Though less weighted than core inflation, the bulk of September's easing in the headline was due to non-core inflation, including prices on more volatile items such as fuels and farm goods. Inegi reported non-core moving to 6.5pc in September from 8pc in August. Despite two months of better-than-expected price improvements, Banorte warned that "risks remain," with energy prices susceptible to gains amid "geopolitical tensions in the Middle East and economic stimulus in China." Still, there is "room to adjust gasoline subsidies" to cushion these effects, it added. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more