SUZANO SA, the biggest producer of hardwood pulp, is considering selling its products to China priced in yuan, adding to signs that the U.S. dollar is losing its dominance in commodity markets.

The yuan is growing in importance and smaller customers in China are requiring deals linked to the Chinese currency, Suzano CEO Walter Schalka said.

China is the largest commodity buyer and accounts for 43% of Suzano’s pulp.

While the greenback remains dominant, the use of the yuan in contracts for everything from oil to nickel is gathering speed.

Sanctions that ensnared Russia following its war in Ukraine have added to that pace.

Schalka said he believes the dollar will become less relevant, but acknowledged there had not yet been a “major transition” to China’s currency.

Increasing tension between the United States and China is the main concern for the company as it could dampen demand and prices of pulp for a prolonged period, he said.

“China will become more relevant in the global market, I have no doubts,” Schalka said. “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.”          (SD-Agencies)