The Ministry of Livestock, Agriculture and Fisheries (MGAP) estimates that in 2023 the forestry sector will be the one that drives economic growth in the agribusiness sectorreaching a record of exports, estimated at a value close to US$ 3,250 million and allowing the agricultural GDP to increase 2.9%according to estimates set forth in the Yearbook of the Ministry’s Office of Agricultural Programming and Policy (Opypa).
The start of operations of UPM’s second industrial plant – the third in the country for pulp production –, together with the development of projects for the mechanical transformation of wood, “will bring dynamism to the activity of the chain”, the analysis maintains. .
It was reported that 2022 will close with exports from the sector that would reach US$ 2,446 million. That value generated by exports is 13% higher than that registered in 2021 in the chain.
This year, the increase in the average export price of cellulose stood out, which was decisive for the increase in foreign exchange earnings.
The exported value of the main products in the chain increased, except for round pine wood.
Forest exports.
A fall and a boost
To visualize the impact of the start-up of a new pulp mill in Uruguay, the MGAP technicians considered two scenarios: if the plant works in 2023 and if it does not.
In the event that this industry does not operate, there would be a drop in the added value of the agricultural sector of 0.7%, since outside this sector a drop in agricultural production is expected -due to the impact of the water deficit- and productivity levels similar to those of 2022 in the rest of the items.
While on the other hand, if one thinks of the active plant, which starts operating in the second quarter of the year at 60% of its installed capacity and 80% during the third and fourth quarters, an expansion of 2 can be projected .9% of the sectoral added value explained by a growth in forestry.
The third pulp mill “will provide a strong boost to the added value of the agricultural sector,” the document highlights.
Opypa’s technicians highlighted that with the third plant in operation, the combined pulp production capacity of the three industries will reach 4.7 million tons per year.
In this way, the participation of pulp in exports of national goods will be greater.
“Besides, the country will position itself among the world’s leading producers of short fiber pulp”, they highlighted.
John Samuelle
Cellulose production.
Cellulose leads
Cellulose topped the ranking of exports of that agricultural sector in 2022. But, in addition, eucalyptus chips, rolls, plywood boards, coniferous sawn wood, non-coniferous sawn wood, paper and cardboard were also sold abroad.
As detailed in the Opypa Yearbook, these products were mainly destined for markets in Europe and Asia.
If pulp is excluded, China (36%) and the United States (18%) were Uruguay’s main clients in this area of agricultural exports, followed by the European Union (12%) and India (11%). If the accumulated figures for the first nine months of this year are taken into account, the time in which China reduced its demand, the order of the markets changes, because the relative participation of China became 19%, while that of the bloc of the European Union was 23%.
Pulp exports are mainly concentrated in the European Union and China, markets that captured almost 80% of sales in 2021. But, in addition, other destinations to which Uruguay exports this product are Argentina (6%) and South Korea (6%) and Turkey (5%).
what enters
Uruguay imports production from the forestry sector. These purchases in 2021 showed an appreciation of 25% compared to 2020 and reached US$155 million. It is expected that by the end of 2022 purchases will show an increase of 18%, reaching US$ 229 million.
Paper and cardboard continue to be the main products imported by Uruguay, as well as related manufactures. Purchases of these products are estimated at US$ 183 million. While, on the other hand, other products such as solid wood boards were also imported, for a value of US$ 35 million (15% of total purchases).
John Samuelle
The productive area continues to expand.
The perspectives
The prospects for 2023 for the forestry sector are subject to a loss of dynamism worldwide in the economy, particularly due to the deterioration in the performance of the main markets that buy products from Uruguay, for example China.
As explained in Opypa’s yearbook, the “relatively high” pulp export prices that have been observed recently suggest that “a moderation in its trajectory” be considered. These values ”point to a measure of exports in the coming year,” it was noted.
John Samuelle
The sector is advancing towards leadership in the generation of foreign currency.
The amount
US$ 229 million is the estimated value for forestry imports that Uruguay made in 2022.
War, pandemic and business
The business of 2022 was marked by several international events, such as the war between Russia and Ukraine, the “cooling signs” of the global economy -and particularly of China-, the anti-covid protection measures and the costs of maritime freight, the yearbook was detailed, where it was reported that in this framework the demand for some products was affected, such as pine logs. For this product, Uruguay found an attractive market in India.
