Ecuador’s exports to its various markets closed 2022 with a 16% increase in non-oil shipments, reaching $21,071 million. In the case of non-oil and mining exports, they also saw an increase, reaching $18 billion, with shrimp, bananas, fish and other traditional products leading the main export offerings, according to Central Bank data.

However, despite the good general development, there were sectors that ended last year with red numbers, the trend of which will continue in 2023, such as wood, plastic, leather and rubber and their production.

According to figures from the Ecuadorian Federation of Exporters (Fedexpor), from January to December 2022, wood and wood products generated $581 million in foreign currency, representing a 26% share of non-mining and oil exports.

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The sector grew by only 2% in value, but had -6% in exports.

Its main market was China, which grew by 6% in export value, but in contrast showed a 22% decline in volumes; the same situation that showed his other two potential markets, Colombia and the United States.

The value of Colombia’s exports increased by 18%, but the volume decreased by 4%. While the United States fell in both aspects: -11% in sales and -4% in export volume.

Christian Riofrío, executive director of the Ecuadorian Association of Wood Industry (Aima), explains that in the case of the Chinese market, a drop in exports is predicted.

“After the high exports we had in 2020, a decline in balsa exports is expected, mainly, in the case of closed wood there are different and perhaps complementary behaviors that compensate for the decline,” said Riofrío, who assures that despite the drop in volume, the sector has generally grown, according to his in numbers, 3.3% compared to 2021 with an income of $650,606.51.

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“These figures are important at the level of the forestry industry, since the total import for the same year amounted to 541,582.79 dollars, which shows a positive trade balance,” President Aime points out.

In the case of the plastic, rubber and leather sector; and its producers exported $238 million in 2022 with an 11% share in non-oil and mining shipments.

Despite the reported growth of foreign exchange income of 7% compared to 2021; the export volume fell by 8%.

The main markets for these sectors, such as Colombia, Peru and the United States, reported contractions in export volumes by 3%, 14% and 6%, respectively. While in terms of values, Colombia and the United States rose 12% and 13% respectively, but Peru fell 1%.

According to the Ecuadorian Plastics Association (Aseplas), in 2022 the increase in input costs exceeded 60% at some point and affected all plastic products, such as pipes, water tanks, household items, agricultural materials, lids and packaging among the main products . .

Jorge Mórtola, president of the Ecuadorian Plastics Association (Aseplas), assures that the success of exports in his sector should not be measured by the increase in sales in dollars, because he explains that in some cases this is due to the increase in the cost of raw materials and their burden.

“In addition, in most cases the increase could not be fully passed on to the customer, which affected the profitability of the product. It affected not only Ecuador, but the world as well,” says Mórtola, who reveals that there were several situations that contributed to the sector’s results in 2022.

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First, FOB feedstock prices increased at rates not seen in 30 years, largely driven by unique factors such as petrochemical companies shutting down for maintenance and petrochemical input plants shutting down for maintenance taking advantage of the pandemic. .

Secondly, Mórtola cites the closure of operations in China, with the consequent impact on consumer demand and oversupply from a producer’s point of view.

Added to this is the partial closure of the port of the Asian giant and the lack of containers, which caused the purchase orders to be delayed and some suspended.

“At one point, the final increase exceeded 60 percent and affected all plastic products, although tubes, water tanks, household items, agricultural material, lids and packaging can be highlighted among the main ones,” says the president of Aseplas.

2023 started with red numbers

Meanwhile, 2023 did not start with very encouraging production numbers either. Fedexpor’s analysis shows that the export of wood panels and plastics and their products recorded a decrease of 12 percent last January.

According to Fedexport, there is currently downward pressure on the price which is complemented by lower volume exported, resulting in lower export levels.

For example, the leather, plastic, rubber and their manufacturing sector exported products worth $13 million last January, 30% less than in January 2021.

Mórtola says the industry is cautious, noting that so far, including February and March, there is a clear recovery in volumes, but raw material prices are volatile, which affects inventory forecasts.

“We hope that the government will initiate the long-awaited public investments, that public institutions will at least regain their level of efficiency and that preferential credit will be given to the industry,” says the industry leader, who adds that the security costs incurred in the industry already exceed those from the pandemic, although he prefers does not detail this aspect as it is a transversal effect that also affects the commercial sector.

Meanwhile, the sector of wood and its production exported 41 million dollars, 6% less than in January 2022 (I)