If quarantine and mobility restriction measures are extended by two months, it is expected that by the end of the year the annualized demand for industrial wood products in Central America will have fallen by 10%.
The "Information System for the Impact Analysis of Covid-19 on Business", prepared by the Trade Intelligence Area of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, considering different scenarios for the coming months.
In the first six months of 2019, $139 million in wood and wood products were exported from Central America, and 54% of them were sold by companies in Costa Rica and Panama.
Figures from the Trade Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with graphics"]
Because wood is being demanded for different types of use, opportunities have been identified to design and manufacture several differentiated products with high marketing potential.
According to Guatemalan businessmen in the sector, wood is no longer being used only for the manufacture of furniture or decoration of residences, but is also being demanded in corporate spaces such as offices and work environments, and in places such as retail stores, restaurants, hotels and hospitals.
In the first six months of 2018, exports of timber and wood products from the region totaled $156 million, 3% more than the same period in 2017, partly because of sales to India.
Figures from the Trade Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
On June 6 and 7, wood producers and exporters will be meeting in Antigua, Guatemala, to explore business opportunities with international buyers.
The Living Interior Furniture Expo (L.I.F.E.) is being organized by the Guatemalan Exporters' Guild, and will be held in Santo Domingo Del Cerro, in Antigua Guatemala.
In 2016, Central American countries exported $223 million worth of wood and its manufactures, and the value exported to India grew by 20% compared to 2015.
Figures from the information system on the Central American Market for Wood and its Manufactures, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with the chart"]
Furniture and household articles, pellets and laminated wood are among the products with the highest demand in the global wood market.
From the executive summary of a study by Procomer entitled "World lumber market and trends for value-added products":
Goods that incorporate a higher level of manufacturing are those that show the highest levels of growth in world imports, or other products that are less processed but which participate in sectors which are of value per se (sustainable construction).
In April it will be not long until an agreement is reached between Honduras and the EU for marketing timber in the old continent, which is sourced from sustainably harvested forests.
An article on Laprensa.hn reports that "...The delegations from Honduras and the European Union (EU) expect that in April the sixth and final round of negotiations for the Voluntary Partnership Agreement (FLEGT Ava) will be held."
It has been estimated that China will require 800 million cubic meters of timber in 2020.
From a statement issued by Costa Rican Foreign Trade Promotion Office:
A study by the State Forestry Administration (SFA) in China shows that the country's timber demand will rise to 800 million cubic meters in 2020. The Chinese government plans to build a billion square meters of green buildings between 2011 and 2015 and expects that by 2015 20% of new urban buildings will be ecological.
Negotiations are underway for a voluntary agreement to channel excess supply of wood in the Honduran market by exporting it to the EU with legal certification.
"... With the European Union we are negotiating a voluntary agreement to export timber and open the market which today is very insignificant, less than 2%, but we hope that in the future it will be the largest source of Honduran timber exports," said José Trinidad Suazo, executive director of Forest Conservation Institute (ICF).
The European Union has put into effect a regulation to combat trade in products manufactured with illegal timber with an emphasis on traceability.
From an article by the Costa Rican Trade Promotion Office (PROCOMER):
In March the European Union (EU) put into effect Regulation (EU) 995/2010 of the European Parliament which seeks to regulate the market for wood products in order to minimize the risk of selling illegal timber in the EU, this regulation requires the operator or company responsible for introducing a product of this nature to the region to be able to apply the principle of "due diligence", so as to ensure that timber traded is legal.