The state of Mato Grosso is the second largest producer of forest-grown hardwoods in Brazil. Five million cubic meters of timber were produced in the state in 2017, with 72 thousand cubic meters of wood products being exported, generating a revenue of US$ 149.6 Million.
And the timber industry in Mato Grosso is expected to realize significant growth in 2018. In the first five months of the year, the state exported nearly US$ 66 Million of wood products representing an increase of 25.9% in commercial revenue over the prior year.
Zero illegal deforestation by 2020
Several years ago, the government of Mato Grosso signed an agreement to eliminate illegal deforestation in the state by the year 2020.
Additionally, Mato Grosso aims to reduce deforestation by at least 90% in the Amazon and Cerrado biomes and increase the area of timber harvesting under sustainable forest management plans (PMFS) from 2.8 Million hectares to 6 Million by 2030.
To eradicate illegal deforestation in the state by 2020, a coalition was established between the government of Mato Grosso, soy and beef producers, Brazilian and international NGOs, and the foreign aid agencies of the Netherlands and Norway. The purpose of this coalition is to help Mato Grosso access finance and commodity markets and attract public investment in cattle intensification and reforestation.
Forest law enforcement intensifies in Mato Grosso
Because Mato Grosso’s access to financial and commodity markets depends, in part, on its ability to achieve zero deforestation by 2020, the government of Mato Grosso has recently intensified forest law enforcement actions.
Between January and October of this year, punitive actions have been taken against 105 wood products companies in the state. Recently, authorities seized almost three thousand cubic meters of wood – enough to fill 140 truckloads. It was the biggest timber seizure in Mato Grosso in 10 years.
Recent, major forest law enforcement actions include:
- 140 truckloads worth of wood seized in Mato Grosso
- 22 identified in the illegal logging of Ipe in northwestern Mato Grosso
- 1417m3 of logs and lumber seized in Aripuanã
- Owner of a timber company in Nova Lacerda arrested after 355m3 of allegedly illegal logs and lumber discovered
- IBAMA fines timber company US$ 190,000 in Sinop
The scale and frequency of forest law enforcement actions in Mato Grosso are a testament to the government’s commitment to achieving zero illegal deforestation.
Implications for timber purchasing strategies
The intensification of forest law enforcement in Mato Grosso is not, and will not affect all timber buyers equally. Those who are not implementing robust due diligence processes as part of their day-to-day operations, and/or do not have good visibility into their supplier’s raw material chain-of-custody, including the physical point-of-harvest, are experiencing, and will continue to realize significant costs.
On the flipside, timber buyers with robust due diligence processes in place, stand to gain from Mato Grosso’s increased forest law enforcement in a number of ways. It also provides them with the opportunity to distance themselves from competitors who lack formal supply chain risk-management strategies and it creates a window of opportunity to increase their foothold in a part of Brazil that is committed to good forest management.
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