Leonel Azuncor, a representative of the Ecuadorian cardboard industry, told a press conference that the price of cardboard boxes destined for the agro-export sectors will increase "between 12% and 14%." This increase is in line with the increase in the cost of paper, the raw material used to make cardboard that is mainly imported from the United States and part of Europe.
In 2023, cardboard prices experienced a significant decrease, a stark contrast to the disproportionate increase recorded in 2022 due to the increases in the price of raw materials, oil costs, and the widespread logistical problems there were in the distribution of goods.
According to Engineer Luis Alberto Jaramillo, commercial director of the Ecuadorian cardboard industry (ICE), belonging to the Noboa business group, three key factors will influence the increase of this important input in 2024.
The first factor mentioned by Jaramillo is the importance of paper as a commodity, closely linked to other raw materials such as oil, metals, and grains. The United States has already announced increases in export prices, reaching 14%. This is due to measures ordered by manufacturers to restrict supply, such as closing non-competitive plants and making improvements. This restriction especially affects manufacturers of corrugated cardboard for agricultural exports in countries such as Ecuador, Peru, and Chile.
The second factor that will contribute to the increase, according to Jaramillo, is the difficulty that paper importers face in bringing the raw material through the Panama Canal. This has resulted in higher transportation costs and delays, forcing some importers to divert their merchandise through the Strait of Magellan, south of the canal, or to move paper from the east coast to the west coast to meet deadlines, especially in high season.
The third factor highlighted by Jaramillo is the conflict between Israel and Hamas, which began in October 2023. Although it was expected to affect commodities, the main impact has been the belligerence of the Yemeni Houthis, who have attacked Israeli-licensed ships in the Suez Canal. This has had an impact on shipping rates and has led transport lines such as Maersk to avoid the Red Sea route, diverting cargo through the Cape of Good Hope, with consequent cost issues and logistical delays, especially for perishable cargoes.
According to Jaramillo, it's difficult to determine a fixed price for agro-export cardboard boxes because several factors affect their final cost. Currently, a box could cost around $1.30. The national papermaking industry, valued at approximately one billion dollars, imports 50% of its raw material from two main markets: the United States and Europe. The scarcity of paper is the factor that has the biggest influence on price increases, and even though Jaramillo doesn't believe things will be as bad as two years ago, he does foresee logistical complications that could affect the first four months of the year.
Source: bananaexport.com