Wood costs for pulp mills in Brazil have gone up over the past few years, reaching their highest levels in over 20 years in 2011, according to the Wood Resource Quarterly. However, towards the end of the year, eucalyptus prices fell, mainly because of the strengthening US Dollar.Eucalyptus log prices in Brazil reached a peak in the third quarter last year, but fell back almost eight percent in the fourth quarter in US Dollar terms, because of the strengthening Dollar. Current price levels are still among the highest since the Wood Resource Quarterly started tracking Brazilian wood prices in 1990.Prices for Eucalyptus pulpwood traded in the open market are high not only from a historical perspective, but also as compared to many other regions around the world. Only pulp mills in Europe and Australia had higher hardwood fiber costs than Brazil in late 2011, while North America, Chile, Russia and Indonesia all had lower hardwood log prices than the world’s largest market pulp exporter.Wood fiber cost is by far the most important cost component for Brazilian pulpmills, more so than for most other pulp mills in the world. In the fourth quarter of 2011, wood costs accounted for as much as 72 percent of the total cash costs in Brazil, according to Fisher International. This is substantially higher than the global average of 61 percent.