PULP DEMAND IN THE INTERNATIONAL MARKET

Abstract

This study aimed at analyzing the international pulp market, taking into account the main exporting countries and importing regions, with the objective of estimating, for each market, the own-price and cross-price elasticity in relation to the demand of the pulp, differentiated for country of origin. The model considers that imports are differentiated by origin; therefore they are not perfect substitutes. The demand from Europe, North America and the Rest of the World for the pulp from the United States,Canada, Sweden, Finland, Portugal and Brazil was inelastic. The Asian demand for this some pulp was elastic. Europe and the Rest of the World showed negative cross-price elasticity, i. e., and the imported pulp from other countries are complementary products. North America and Asia showed positive crow-price elasticity, i. e., they consider the pulp produced in other countries as substitute products. The net effect of the variation on the price of pulp in a country h, over the amount of pulp that goes to the region i depends on the matching of values related to the elasticity of substitution and the price elasticity of the total demand.