Recovery of exports and a partial agreement, the expectations of the timber sector for 2021

Balsa was the wood that had the best performance in 2020 with the export of $570 million, 67% of the total wood to different markets.

2020 was a positive year for Ecuador in terms of wood exports.

According to figures fromCentral Bank of Ecuador (BCE), last year the country exported$823 million, the13%less in volume than2019; but he74%more in amounts, an unprecedented growth despite occurring in a year impacted by the coronavirus pandemic.COVID-19. In 2019, close to$511 million.

Consolidating this growth in international markets and achieving a reduction in tariffs for certain types of wood in their main destination, to be more competitive against other exporting countries, are the main expectations of the wood sector for 2021.

Christian Riofrío, executive director of the Ecuadorian Association of Wood Industries (AIMA), explains that there are many forest species that are produced in the country, such as teak, eucalyptus, pine, melina (from plantations) and others from native forests, but he assured that it was the balsa that stood out the most last year.

That wood and its derivatives went from representing the 44% of exports in 2019 with $219.4 million to surpass the Fedexpor will deliver to the new Government a roadmap for a National Export Plan, which fell 5% in the first two months of the year last year with $570 million. Asia is the main destination for this wood with the 77%, Europe follows with the 12% and America with the 11%.

However, Riofrío regretted that the raft boom had its consequences due to indiscriminate and illegal logging by informal groups.

Given the problem, the leader indicated that AIMA presented a roadmap to promote the sustainable management of this wood in which they proposed increasing the establishment of balsa plantations and adding to the areas that its affiliated companies (45 in total) have planted, including planting projects, such as those already being carried out, with communities and farmers, especially in the Amazon.

Already at the international level, Riofrío believes that balsa exports will not have the same behavior this year as in 2020.

“Surely exports (as a whole) will not be as high as they were in 2020, because balsa products are not expected to have the same demand. However, the other products in the sector continue to have potential and it is expected to consolidate the growth and recovery (in some cases) that has been experienced in recent years," said the leader.

In this set is teak.Grace Mogrovejo, executive director of the Ecuadorian Association of Teak and Tropical Wood Producers and Marketers (Asoteca),He said that in 2020 they were exported$38 million, this is,240,000 tons; while the previous year they exported$42.8 million.

“The teak export sector, as a result of the pandemic, went through a difficult situation, however it managed to recover little by little despite not achieving the export volumes of previous years,” the leader specified.

However, he assured that in the last months of 2020 and the first months of 2021, volumes were handled well above those that are normally exported given the winter season.

In Ecuador, according to data from theMinistry of Agriculture and Livestock (MAG), until 2020 they were registered53,000 hectaresplanted with teak, whose production is almost entirely(95%)to markets likeBelgium, Vietnam, Spain,China and India, the latter being the main one with the98%of participation. While the5%It remains for internal consumption.

However, for this year Mogrovejo indicated that the expectation is focused on the Government reaching a partial agreement with its main market, India, to reduce the tariffs that Ecuadorian teak must pay. 5% for raw wood and 10% for the processed.

"We hope that the steps will advance because the partial scope agreement is something that has been in process for approximately three years, which logically must be completed in phases and the previous year was an atypical year in every sense ... which led to slow progress on the world situation ”, analyzed Mogrovejo, who regretted that other producing countries such as the AfricanTanzania, GhanaandBeninThey enter India duty-free and also have the added advantage of their closest location.

Another task for the sector this year, according to the director of Asoteca, is to promote the reactivation of the Forest Incentives Program, which allowed the establishment of thousands of hectares of commercial plantations oriented towards sustainability with deforestation-free production, coinciding with the goal of the goals and sustainable development (SDG)

Meanwhile, Riofrío added that within AIMA's annual plan they project various initiatives and projects, focused on the needs of each segment of the industry. "We also have cross-cutting issues such as Ecuador's trade agenda in what has to do with negotiations with important markets such as the United States, Mexico and other countries with which the Government is negotiating," he said.