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. But, after it reactivated its economic activity, the Asian country began to hoard raw materials that are used in the plastic industry.
From January to June 2020, Central American countries imported $169 million in plastic pipe and accessories, and purchases from German companies increased by 64%, when compared to the same period in 2019.
Figures from the Trade Intelligence Area of CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
From January to March of this year, Central American countries imported $96 million in plastic pipe and accessories, and purchases from U.S. companies increased by 3%, when compared to the same period in 2019.
Figures from the Trade Intelligence Area of CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
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"]
From January to April 2020, Central American companies imported $11 million in plastic pipe and fittings from Mexico, and 69% of the total was purchased by companies in Guatemala and Costa Rica.
Figures from Trade Intelligence Unit of CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
Currently at least 55 companies offer 89 types of masks that are manufactured using different types of polymers, with characteristics of design, production, thickness and above all, a wide variety of accessories and styles.
From July 1 to 3, the Ministry of Economy, Industry and Commerce (MEIC) conducted a search for information on the Internet and social networks such as Facebook and Whatsapp of commercial establishments throughout the country that promote their products and offer the option of home delivery.
Basf de Costa Rica S.A., Sun Chemical S.A. and Ultra-Chem de Centroamérica S.A., are part of the companies participating in the nylon import business in Central America.
The market study "Nylon market study in Central America", prepared by the Trade Intelligence Unit of CentralAmericaData, details the main figures of the nylon import business.
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.
From January to September 2019, Central American countries imported $290 million in plastic pipe and fittings, with Costa Rica and El Salvador being the markets where purchases increased.
Figures from the Trade Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with graphics"]
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"]
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.
From January to June of this year, Central American countries imported $193 million in plastic tubing and fittings, and companies in Costa Rica and Panama accounted for 64% of total regional purchases.
Figures from the Trade Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with graphics"]
In Costa Rica, the Assembly approved in second debate the bill that prohibits the delivery and sale of plastic straws and the purchase of single-use plastic in state institutions.
The initiative now only awaits the approval of the Executive Branch. The Legislative Plenary approved on October 31 in its second debate, file 20.985 Law to combat pollution by plastic to protect the environment, which among other things prohibits the marketing and free delivery of plastic straws for single use throughout the national territory, reported the Legislative Assembly.
The Legislative Assembly approved in the first debate the bill prohibiting the commercialization of plastic straws throughout the national territory, as well as the purchase of single-use plastic in all state institutions.
In addition, the marketing and free delivery of plastic bags to the final consumer in supermarkets and commercial establishments whose purpose is to carry the goods to their destination is prohibited, explains an official statement.
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