Brazil gum turpentine exports down in 2023

Brazilian gum turpentine exports in 2023 fell 4.2pc year on year to 26,976t as buyers in the US and France reduced purchases amid high stock levels and softer downstream markets.

Brazilian gum turpentine exports to the US declined by 61.7pc year on year to 2,440t, from 6,284t in 2022, according to data from Global Trade Tracker (GTT). France, another key market, imported 822t of Brazilian gum turpentine in 2023, a 63pc reduction compared to the 2,217t it had purchased in 2022, GTT data showed.

The US was not a significant buyer of South American gum turpentine in 2023 as stocks were elevated and were bought at higher prices in 2022. The supply of crude sulphate turpentine (CST), a competing product, was also ample.

France, previously the second largest buyer of South American gum turpentine, has sharply reduced Brazilian imports in the last few years. A key buyer in the aroma chemicals sector has faced softer downstream demand and high inventories, while also closing a terpene resins, wood rosin and gum rosin facility in the US in 2023.

With the tightening of pine oleoresin feedstock supply in Brazil in the 2023-24 season, Brazilian gum turpentine availability and inventories have become thinner this year, suppliers said.

Brazilian sellers are hopeful that volumes sold into the US will be higher this year compared with the volume the country imported in 2023. Business activity in the US has increased as buyer inventories are lower and Brazilian prices remain competitive compared to 2022 and early 2023 levels.

This year, the US has imported a total of 883t in January and February this year, levels not seen since late 2022. According to GTT data, the US is the second largest buyer from Brazil after India for the January-February period this year.

As Brazil gum turpentine availability is tighter and US demand into aroma chemicals started to rebound this year, prices for the Brazilian product have increased in recent months.

Argus assessed Brazilian Pinus elliottii based gum turpentine spot prices at $2,000-2,100/t fob Brazil port on 1 April, up over 16pc from the $1,650-1,800/t fob Brazil port levels seen on 3 January.

Japan, the third largest buyer in 2023, imported 3,126t, up by 21.8pc year-over-year from the 2,565t in 2022. Japanese imports of Brazilian gum turpentine in the first two months of 2024 are stable at 601t, the same level seen in January-February 2023.

China was the second largest buyer of Brazilian gum turpentine in 2023. Before and during Covid, Chinese demand dropped sharply with purchases declining from 1,044t in 2021 to a record low of only 480t in 2022.

Brazilian exports of gum turpentine to China dropped to almost zero from July 2021 because of competitive pricing from Indonesia and more expensive post-Covid freight rates. But improving shipping economics in 2023 and lower Brazilian gum turpentine pricing enticed Chinese buyers, and imports increased from the record low seen in 2022 to 4,884t in 2023.

Chinese imports of Brazilian gum turpentine have been higher so far in 2024, according to Chinese trade data. China imported 620t in January-February this year, an 11pc increase from the same period of 2023. India, the largest buyer from Brazil, bought 12,509t in 2023, a slight decline from the 12,944t it purchased in 2022. With lower pricing for the Brazilian product this year relative to early 2023, Indian volumes in the first two months of 2024 rose to 2,042t from 1,961t in the same period of 2023.

Sellers in Brazil believe tighter supply can support firm pricing looking forward, but demand from markets like China and India are largely price driven.

By Leonardo Siqueira