Panamanian timber exports continue to decline, according to APEX

Lourdes García Armuelles
In 2024, Panama exported 6,500 containers of timber to the international market. Shutterstock

Most of the wood produced in Panama is tuca, of which 15 % is of medium quality, 5 % of high quality and 80 % of low quality, in an increasingly demanding market.

 

Panamanian timber exports to Europe are down, mainly due to the recession in Germany, reveals the Panamanian Exporters Association's (Apex) Teak Export Outlook Report and Strategic Roadmap Proposal for Certified Commercial Reforestation.

 

The document also suggests an imbalance between the oversupply of low quality teak and the growing demand for premium teak, and therefore urges strategies to diversify markets and products along with management changes in the farms that are classified as premium producers.

 

Two weeks ago, the Panamanian teak industry shipped the first container to the United States and received the first sale to Italy, which will be shipped at the end of January.

 

In the last 10 years, for example, the price of low quality (wood) has fallen, while the price of high quality teak has risen. The difference in price was three times between low and high quality teak, and it is expected that soon that difference will be 20 times per meter between low and high quality.

 

According to the report, India purchases 50,000 containers of tucas and 12,000 of processed teak annually, but has not been able to absorb the excess supply generated by Latin America.

 

According to APEX, in 2024 Panama exported 6,500 containers of tucas, representing 9% of the Indian market, which is the largest in the world. It also increased shipments to Vietnam, but exports are still down.

APEX figures indicate that 95% of Panama's timber production is mainly acquired by India, but the demands of that market have increased, as a minimum of 12 years and 50 centimeters in circumference is required, which leaves a surplus of inventory on the ground.

 

“Apex acknowledged that 80% of Panama's production -for the Indian market- is low quality tucas. The wood used to manufacture outdoor furniture has maintained stable prices, but with a recent decrease in demand in Europe and the United States, due to changes in post-pandemic consumption. Fifteen percent of Panama's wood is medium quality tuca.

 

The report also stressed that there is a high demand for wood from native forests, for use in yacht flooring, luxury furniture, windows; however, it is prohibited to import this raw material to the European Union and the United States. Although Panama has the ideal conditions to produce wood of this quality, APEX indicated that a focus on premium production and FSC certification is required to access very demanding markets in terms of quality. In Panama, 5% of toucan production is of high quality.

 

To diversify the market and products, APEX believes it is important to promote exports to certified markets focused on Europe and the United States and to promote local production to supply domestic demand, replacing imported products with competitive, quality alternatives.

 

In terms of promotion, the association recommended including teak in the exportable supply promoted by the Ministry of Commerce and Industries (MICI).

 

As well as publishing updated studies on exports and deforestation on the MICI and Ministry of Environment platforms.

 

Likewise, define the participation of the diplomatic corps in international fairs and events. In addition, to align efforts between the public and private sectors to establish a strategic plan to position teak as a premium product.

 

In the opinion of Bianca Morán, president of APEX, the Panamanian forestry sector has very high potential, and there is a good chance that in ten years it will be a world leader in the production of high quality teak, with an export figure of hundreds of millions per year. “Panama has everything to get there, as long as the authorities do their part,” he said.

 

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Panamá Teak is a registered trademark dedicated to the marketing and sale of forest products crafted from 100% FSC® certified tectona grandis teak, naturally grown and commercially cultivated in the Republic of Panama.

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