The world's largest pulp producer: considering exporting to China in RMB
The world's largest pulp producer: considering exporting to China in RMB
Suzano SA is the world's largest producer of hardwood pulp, based in Brazil, with a global hardwood pulp market share of about 15 percent in 2020, according to public information. China is the biggest buyer of commodities and accounts for 43% of the pulp Suzano sells.
Brazilian companies are accelerating their embrace of the RMB
If Suzano SA finally decides to export its products to China in yuan, it will predictably be the latest example of Brazilian companies accelerating their embrace of the Chinese currency. China and Brazil signed a memorandum of understanding early this year to establish a renminbi clearing arrangement in Brazil, under which Brazil will settle directly with China in its own currency rather than using the US dollar as an intermediary currency.
In March, the Industrial and Commercial Bank of China (Brazil) successfully handled the first cross-border RMB settlement business. In this business, ICBC Brazil supports the successful use of renminbi for direct settlement between traders. The business presents significant advantages in clearing efficiency, exchange costs and security of capital and information flows Paper Box Packaging .
In late March, Brazil's central bank announced that the renminbi had overtaken the euro to become the country's second largest international reserve currency.
During a visit to China in April, Brazilian President Luiz Inacio Lula da Silva said, "Every night I think about the question, why do all countries settle in dollars? Why can't the renminbi or some other currency be the international settlement currency? Why can't [Brics countries] settle in their own currencies?"
It is worth mentioning that if Suzano SA can settle its exports to China in RMB, it may also be a good thing for the domestic paper industry. Last week, an investor asked the secretary of the board of Merrycloud, which owns the paper business: "As the world's largest pulp exporter, Brazil recently realized direct trading of yuan with China, whether it will have a positive impact on the paper industry."Paper Packaging.
Mei Liyun Dong Secretary said that the realization of direct RMB trading between China and Pakistan is conducive to reducing the risk of exchange rate fluctuations and improving transaction efficiency, and in the long run, it will have a positive impact on the development of the paper industry.
