From January to September 2020, imports for plastic and its manufactures totaled $2,681 million, 13% less than what was reported in the same period of 2019, a drop that was reported in the context of the economic and sanitary crisis caused by the Covid-19 outbreak.
Figures from the Trade Intelligence Unit of CentralAmericaData: [GRAFICA caption="Click to interact with the graph"]
Following the reactivation of China's economy in mid-2020, the Asian giant has monopolized a good part of the raw materials demanded by industry, a situation that is pushing up costs and generating uncertainty among Central American businessmen.
Due to the pandemic generated by the covid-19 outbreak, production in China was considerably interrupted during the first semester of 2020.
Vacuum packaging, films for use in agricultural production and resin for mass consumption were some of the products that increased their sales in the Guatemalan market during the pandemic.
As a result of the pandemic that generated the spread of covid-19, during 2020 there were changes in consumption patterns, a phenomenon that forced the plastics industry to adapt to the new reality.
Although the sector keeps its operations alive thanks to the packaging they produce for the food and cleaning industry, there is uncertainty among entrepreneurs as the demand for bags, brushes, tableware, furniture and other products has contracted.
As a result of the home quarantines that were decreed in the countries of the region in March 2020 due to covid-19, the outlook for the plastics industry fluctuates between optimism and uncertainty in market behavior.
From January to April 2020, Central American companies imported $151 million in plastic and its manufactures from Mexico, and 60% of the total was purchased by companies in Guatemala and El Salvador.
Figures from Trade Intelligence Unit of CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
In the new commercial scenario generated by the covid-19 crisis, some Guatemalan companies in the plastics industry are manufacturing masks, face masks, gloves and special suits for medical use.
The activity of the sector has fallen considerably due to the restrictions imposed by the outbreak of covid-19, and it is estimated that in the country only 60% of companies engaged in the manufacture of plastic products are working.
In Central America, it is expected that the impact of the covid-19 crisis on the plastic product manufacturing business will be partly explained by the expected drop in sales of bottles and household products.
The "Information System for the Impact Analysis of covid-19 on Business", prepared by the Trade Intelligence Unit of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, during the coming months.
From January to September 2019, Central American companies imported from Mexico 125.6 metric tons of plastic and its manufactures, 14% more than reported in the same period in 2018.
Figures from the Trade Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with graphics"]
In Guatemala, the government announced that in the next two years it plans to build a plastic waste recycling plant that would produce electricity, and the investment would be financed by donations.
The Ministry of Economy (Mineco) is focused on identifying within the metropolitan area which is the most suitable area for the installation of the plant and the plan is that it will start operating within two years.
Companies in the disposable plastic manufacturing sector have the capacity to replace all their production with environmentally friendly options, but the main obstacle is the limited capacity that customers must pay the surcharge for bioplastics.
In Costa Rica, some 31 companies indicated that they have the capacity to replace all their production with user-friendly options, the main limitations being the low capacity of customers to pay the surcharge for bioplastics and the restrictions on the functionality of the alternatives.
As a result of increases in purchases from companies in the U.S., Mexico and China, between the first quarter of 2018 and the same period in 2019, imports of plastic and its manufactures in Central America grew 7%.
Figures from the Trade Intelligence Unit at CentralAmericaData: [GRAPHIC caption="Click to interact with graphic"]
The Guatemalan union of recycling companies estimates that the recycling industry could stop generating about $240 million per year if the agreement prohibiting the use and distribution of single-use plastic goods enters into force.
Following the publication of the agreement prohibiting the use and distribution of single-use plastic articles, some companies are beginning to analyze possible options for no longer relying on this type of product.
In Guatemala, an agreement was published prohibiting the use and distribution of disposable plastic bags in their different presentations, shapes and designs, as well as containers made of expanded polystyrene, known as duroport, a measure that will enter into force in two years.
On Sep. 20, Governmental Agreement Number 189-2019, of the Ministry of Environment and Natural Resources, was published in the Diario de Centroamérica, prohibiting the use of several articles made of plastic and expanded polystyrene.
Changes in legislation restricting the use of disposable plastic containers and packaging force companies to look for other options, some of which could be up to five times more expensive.