Top commodity firm may start using China's yuan, potentially adding to de-dollarization trend

• Pulp-producer Suzano SA is considering pricing its China sales in yuan, its CEO told Bloomberg.
• China is the company's largest market, accounting for 43% of purchases.

Brazilian company Suzano SA is considering deals with China priced in the yuan, signaling that some commodity markets may be joining the shift away from the dollar.

The largest hardwood pulp producer in the world, Suzano sells 43% of its product to China. According to CEO Walter Schalka, smaller customers in the country are requiring that deals are transacted in yuan.

"China will become more relevant in the global market, I have no doubts," he told Bloomberg. "My own perception is that it would be much better to have a long-term collaboration between West and East, but what we see is increasing tension at this point of time."

Schalka added that he thinks the dollar will become less relevant, though he hasn't seen a "major transition" yet to China's yuan.

Still, the company's potential move to the yuan would mark a further gain for the currency, as China has expanded efforts to promote the yuan, also known as the renminbi, in global trade.

Suzano's consideration is also fueled by geopolitical tensions between the US and China, which Schalka said could have negative implications for the price of pulp.

The commodity, used from toilet paper to tissues, is experiencing price lows that are causing a scale down in production. But Schalka said volatility is normal, and expects prices to rise again.

Brazil has also been vocal about ditching the dollar, with President Luiz Inácio Lula da Silva reigniting calls for a BRICS-organized currency last month. This could pose a real challenge for the dollar, but the BRICS nations would have to overcome serious obstacles to create it, experts say.

Suzano marks the latest entry in the growing de-dollarization debate. International Crisis Group co-chair Frank Giustra warned recently that de-dollarization now looks inevitable and threatens to become a national security concern.

Meanwhile, other commentators have dismissed the threat of de-dollarization, saying the dollar's strength would be difficult to replicate and replace.