Latin American food exports start to improve after weak 2023, supporting packaging demand
After reporting weak export volumes throughout 2023 as a result of the economic recession affecting important global markets, the latest food export statistics from Latin American countries are bringing relief for corrugated packaging producers in the region, sources told Fastmarkets. Interested in the latest developments and trends in the paper packaging industry? Speak to our team […]
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After reporting weak export volumes throughout 2023 as a result of the economic recession affecting important global markets, the latest food export statistics from Latin American countries are bringing relief for corrugated packaging producers in the region, sources told Fastmarkets.
Interested in the latest developments and trends in the paper packaging industry? Speak to our team today to discover how we can help you stay ahead of the competition. Learn more.
According to Fastmarkets’ Latin American Monitor, countries including Colombia, Chile, Argentina and Brazil reported higher export figures in January and February, despite fears that the climate event El Niño could harm crops and that the economic recovery in developed nations would not come.
Boost to Latin American food exports
Chilean food exports were 16% higher year on year in January at 640,000 tonnes, with the country improving its revenues by focusing on berries.
“This is a high-priced food that demands good packaging and has more added value than regular fruit exports,” Fastmarkets senior economist for Latin America Rafael Barisauskas said.
Colombian food exports boomed in January. Volumes spiked by 93.2% year on year to 305,000 tonnes, sparking hopes among local market participants that demand will remain strong in the coming months.
“The market was very weak in 2023 and companies had a lot of inventories; we still note limited growth this year, but there are better signs,” a source told Fastmarkets.
According to Barisauskas, most Latin American countries depend on food production to boost containerboard demand.
Food exports positive effects on packaging demand
“Food is responsible for around 66% of the entire containerboard consumption in the region, with fruits getting 10% of this. The focus on the primary sector was taken by several nations in the past, and this continues to impact their gross domestic growth [GDP] and thus paper packaging consumption,” he said. “In 2022, with high inflation and interest rates, global consumption dropped and harmed these markets, but 2024 and 205 have much more room for growth.”
Food is responsible for around 66% of the entire containerboard consumption in the region.
According to the economist, the largest markets for the Latin American primary sector are the United States and China, with some counties in the region specializing in fruits exports.
“The fruit market is one that is especially affected by cycles of reducing consumption power, like we saw in 2023. But now we see the world reacting” to improved purchasing power with increased demand, Barisauskas said.
Brazilian food exports increased by 37.4% year on year in January to reach 4.2 million tonnes. Similarly, February shipments spiked 94.1% in the annual comparison to 4 million tonnes. Local sources reported that positive effects from the higher export volumes – plus improvements in the domestic market – can already be seen in increased packaging demand.
“We see that Brazilian corrugated paper demand has been improving since February, and the positive outlook consolidated in March. The local market is most responsible for that, but exports are also better. There are also more signs that containerboard demand is getting better across Latin America, with packaging producers requesting more quotes for paper and starting to request volumes, something that totally stopped during 2023,” a second source said.
Some countries, however, have not registered higher export volumes thus far in 2024.
Peruvian food exports dropped by 40.3% to 253,000 tonnes in February, while shipments from Ecuador declined by 79.8% to 132,000 tonnes.
“Peru and Central America were more affected by El Niño, and Ecuador had a crisis related to banana exports to Russia, which now is solved. What we see in most parts of Latin America now is an expressive growth of food exports,” Barisauskas said.
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The post Latin American food exports start to improve after weak 2023, supporting packaging demand appeared first on Fastmarkets.