Pine Log Price Changes in South America: A Comparison of Argentina, Brazil, and Uruguay Markets

We analysed the degree of price cointegration among pine log markets in northeast Argentina, Parana State of Brazil, and Uruguay by examining price series over the period 2008-2020. We evaluated the cointegration of price series of the same product through the study regions. In the same way, we analysed the cointegration of price series of different products within the same zone. We found market cointegration for medium sawlogs and export logs, between Parana and Uruguay and between Misiones and Uruguay. In addition, pairwise groups of sawlogs, pulpwood and woodchips were cointegrated in sawmill and pulp mill-markets. In regions without pulp mills, the prices of sawlogs and veneer logs of similar size and quality were cointegrated. These results reveal the existence of a dynamic of substitution. Usually, veneer logs are delivered to sawmills. However, in some situations, small sawlogs may be downgraded and sold to pulp mills.

Automated summary

This study analyzed the price cointegration among pine log markets in northeast Argentina, Parana State of Brazil, and Uruguay from 2008 to 2020. The cointegration of price series of the same product across different regions and the cointegration of price series of different products within the same region were evaluated. The results revealed the existence of market cointegration between Parana and Uruguay, Misiones and Uruguay, as well as among sawmill and pulp mill-markets.