South American softwood lumber exports decline amid Europe’s surge

Softwood lumber exports from South America plummeted deeper in the first quarter in the wake of a steep plunge in 2022. Shipments from Chile, by far South America’s largest exporting nation, fell to 1.18 million cubic meters through March, down 43% compared to the first three months of 2022.

Chilean exports to foreign destinations declined to 6.9 million cubic meters last year, down 30% compared to 2021, according to figures from Global Trade Atlas. Brazilian shipments offshore slipped to 683,427 cubic meters in the first quarter, down 2% from the year-ago pace. Exports from Brazil fell 18% in 2022 to 2.9 million cubic meters.

As was the case throughout 2022, the first-quarter decline in South American exports mirrored the downward trend evident in North America. Canadian exports to overseas destinations fell 9% in the first quarter while US shipments offshore declined 14%.

Markets struggle to compete with Europe’s lumber expansion

Exporters in both South America and North America have struggled to keep pace with Europe’s rapid expansion in markets worldwide. Europe and Russia have steadily expanded their respective market share in the largest Pacific Rim markets such as Japan, China, and South Korea.

Europe’s export growth is especially evident in the US where shipments from the 10 largest suppliers in the region soared to 611 million board feet in the first quarter, up 38% from a year ago and on record pace after setting all-time highs in 2022.

Meanwhile, Chilean exports to the US, its largest foreign market, slipped 3%, according to Global Trade Atlas data. US Foreign Agricultural Service (FAS) figures indicated a 22% decline in imports from Chile in the first quarter compared to a year ago.

Brazilian exports to the US fell 8% according to statistics from both Global Trade Atlas and the US FAS. The agencies reported widely different volumes for both Chilean and Brazilian exports to the US, which is not unusual.

South American export challenges reach East Asia

Chilean exports to China reached 146,147 cubic meters (62 mmbf) more than double the volume shipped in the first quarter of 2022. Deliveries to Japan gained 4%. Exports to South Korea plunged 39% to 72,213 cubic meters.

South Korea was Chile’s largest Pacific Rim market in 2022. Some traders note that competition from European suppliers was especially strong in this country, supplanting both South American and North American species.

Demand for Chilean Radiata Pine strengthened in Central America in the first quarter. Shipments to that region climbed 19%. Exports to El Salvador reached 23,652 cubic meters from trace volumes a year ago. Deliveries to Guatemala jumped 63%. Those gains offset a 16% decline in exports to Costa Rica, historically among the most common destinations in the region.

Chilean exports to Mexico reversed course abruptly in the first quarter. Shipments soared to 1.75 million cubic meters last year, up 164% compared to 2021. Deliveries in the first quarter of 2023 plummeted to 79,309 cubic meters, down 76% from a year ago.

Trends in Mexico ran just the opposite for Brazilian exporters. Shipments to Mexico rebounded in the first quarter, increasing 11% on the heels of a 19% decline in 2022 compared to 2021.

Want to learn more about the lumber market, prices, or forecasts? Check out our dedicated page for timber/lumber, other wood products, or speak to our team about accessing our news, analysis, forecasts and more.