An econometric model for demand of pulpwood market in Brazil

Abstract

The pulp industry has a great importance to the economy of Brazil and despite of being one of the biggest producer in the world this industry is still expanding in the country. In spite of the importance of the planted forests as main source for the pulp industry and other products, pulpwood for the cellulose market has received little attention in Brazil. Therefore, the objective of this research is the study of pulpwood demand in Brazil from 1994 to 2016, using econometric tools, where the demand equation was specified and adjusted by the Ordinary Least Squares method. The results showed that pulpwood price and the capacity of the pulp industry explain the pulpwood demand with good econometric results. The pulpwood demand is inelastic to price fluctuations and elastic to installed capacity. These results are consistent with the international estimations and they can assist projecting policies that promote more rational and sustainable management of the wood and consequently the forests.