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South America poised to become world leader in wood chip exports

Published by Steve Coleman on January 27, 2012

A steady appetite for wood chips at pulp-and-paper mills has turned Latin America into the world's largest source in the last five years.

Combined, Chile, Brazil and Uruguay are on track set to account for half of the world's wood chip exports once the fourth-quarter numbers are totalled, says Wood Resources International LLC.

While Vietnam is still the world's largest supplier, Chile has become a close second since 2006 and now accounts for two-thirds of shipments from South America.

"Wood chip exports from Latin America are on track to reach a record high of almost eight million tons in 2011," says Wood Resource Quarterly in a news release. "This would be an increase of seven per cent from last year and of almost 60 per cent higher than in 2006."

Five years ago, Latin America had a 34 per cent share of the world market and, historically, shipped 80-90 per cent of the chips to Japanese pulp mills. While Japanese imports have risen 30 per cent since 2006, the total share going to Japan has declined to about 70 per cent.

The reason, Wood Resources International says, is the fact European pulp-and-paper mills have developed an appetite for eucalyptus chips. Spain, Portugal and Norway have been the major importers. Finland and Sweden have also bought shipments in the last few years.

New destinations for Latin American eucalyptus chips in the past five years have included Morocco, Turkey and China. Industry watchers expect Chile will increase its shipments to China in the next few years because of increased demand from pulp mills in that country.

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