Competitiveness of Forest Products in Paraguay

From the seventeenth century until the mid-1970s wood products were ranked as Paraguay’s most significant source of revenue. Then a massive and catastrophic replacement of native forests by extensive livestock and annual crops began in one of the richest regions in the country. The wood of valuable species still maintains a portion of the export market. However, a sustained demand for its quality has been reduced to one third or less in 50 years, with consequent loss of markets, reduction in industry size, and lower interest in innovation and reinvestment.

But the true extent of extraction is not clear due to a lack of registration of transactions and sub-billing in the local and international trade. There is little presence of the state as regulator, facilitator, supervisor or promoter of forestry investment.

A greater understanding of the current state of competitiveness of the industry for key timber species and social, economic and environmental factors that assist in the implementation of the most effective and efficient instruments would help to address the trend of unsustainable extraction as well as the missed economic opportunities.  This activity would provide such an assessment which could help Paraguay identify new non-traditional products or variants of these, in which the country could be potentially competitive and develop scenarios for regional and international markets, and evaluate existing and potential certification schemes in the country to see how these would influence cost and opportunities for competitiveness.