BRAZIL - FOREST CONDOMINIUMS OFFER NEW OPPORTUNITIES TO INVEST IN HIGH VALUE WOOD

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expansion in Brazil. One of the newest mechanisms, called a forest ?condominium?, has been developed by a private company in the state of Mato Grosso do Sul and is expected to help establish Brazil?s largest area of fully irrigated forest plantation containing native species. The mechanism will group individual investors, with each investor?s share relative to their investment, and establish a private firm responsible for overseeing operations. Guanandi (Calophyllum brasiliense), the species planted in the new project is native, of high value and on the brink of extinction. In the coming years, the demand and price for high value wood will be much greater due to its scarcity and strict environmental laws that prohibit the indiscriminate logging in conservation areas. The system works by offering a lease on farm lands and a services contract for environmental management of the plantation. The leaseholder will make an initial investment and the management of the forest remains with the services provider. The leaseholder will also be entitled to profits from products, such as seeds, wood or any other resources from the plantation. The scheme will also apply advanced technology for forest maintenance and tree planting. One of the new technologies combines drip irrigation and ferti-irrigation systems and is expected to raise productivity of the plantations by nearly 30%. Another project using the tree species Canafistula is expected to be conducted in the near future and should help supply greater raw materials for furniture manufacturing, due to the species? reduced harvesting cycle of approximately nine years.

Source: ITTO's TROPICAL TIMBER MARKET REPORT