Brazilian giant Suzano evaluates selling its production to China in yuan

By Dayanne Sousa*

Suzano SA, the world’s biggest maker of hardwood pulp, is considering selling its output to China in yuan, confirming that the US dollar’s dominance in commodities markets is fading.

China’s currency is becoming increasingly relevant, and the country’s smaller customers are asking for renminbi (CNY) linked deals, said Suzano CEO Walter Schalka, interviewed from Bloomberg headquarters in New York.

The Chinese are the main raw material customers, accounting for 43% of Suzano’s pulp.

Although the greenback continues to prevail, the use of the yuan for contracts of all kinds, from crude oil to nickel, is gaining momentum.

And the bans imposed on Russia following the Ukrainian invasion have accelerated this trend.

Schalka believes that the dollar will become less relevant, although he acknowledges that there has not yet been a “big transition” to the Chinese currency.

The growing tension between the US and China is the company’s top concern, as it could affect pulp demand and pricing for a long period.

“There is no doubt in my mind that China will become more relevant in the world market,” Schalka said.

“My perception is that a long-term collaboration between West and East would be much better, but we see a growing tension at the moment.”

*With assistance from Isis Almeida, Leslie Patton, and Zijia Song.

With information from Bloomberg

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