Spatial and cross-product price linkages in the Brazilian pine timber markets

The South of Brazil is one of the most attractive regions for timberland investments in the world. High productivity and relatively attractive timber prices have gained attention from timberland investors. However, as in most emerging countries, it is not very clear how prices are transmitted across...

Full description

Saved in:
Bibliographic Details
Published in:Forest policy and economics 2020-08, Vol.117, p.102186, Article 102186
Main Authors: Kanieski da Silva, Bruno, Schons, Stella Z., Cubbage, Frederick W., Parajuli, Rajan
Format: Article
Language:English
Subjects:
Economic conditions
Investors
Linkages
Market linkage
Markets
Price transmission
Prices
Pricing
Productivity
Profits
STAR
Timber markets
Timberland investments
Timberlands
Veneers
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The South of Brazil is one of the most attractive regions for timberland investments in the world. High productivity and relatively attractive timber prices have gained attention from timberland investors. However, as in most emerging countries, it is not very clear how prices are transmitted across products and markets. Having this information is essential to strategic planning as well as understand the market structure. We investigate market linkages of the stumpage price of five products (fuelwood, pulpwood, sawtimber, veneer, and special veneer) in the three main pine producing states in Brazil (Paraná, Santa Catarina and Rio Grande do Sul). We use linear and regime shifting models and check the effect of external shocks on price transmission. The nonlinear process is observed main on high-grade timber (veneer and special veneer), possibly driven by their price recovery after the recession. Our results show that the spatial and between product price ratio converges back the market equilibrium within 10 months in the pine stumpage market in Brazil. This outcome indicates this market is efficient with small opportunities for arbritage profits. •Price transmission of stumpage prices present mostly linear behavior.•Timber market in Brazil tend to converge after 10 months to the market equilibrium subsequently to an external shocks.•The shifts between regimes occurred abruptly, indicating fast adaptation of market players.
ISSN:1389-9341
1872-7050
DOI:10.1016/j.forpol.2020.102186