Wood fuel market in Paraguay

Earlier Report Observations

The Paraguayan wood fuel market expanded in volume from 7.3 million cubic meters in 2018 to 7.8 million cubic meters in 2023, driven primarily by consistent industrial demand. An initial boost came from the sugar industry, where alcohol production grew 58% in 2018, increasing the need for wood fuel for process heat. The fundamental cost advantage of wood fuel over electricity, as highlighted in energy studies, maintained its competitiveness as an energy source for industry throughout the period.

Market value experienced greater volatility, declining in 2019 and 2022 but surging 13% to $1.94 billion in 2023. The 2022 dip coincided with global market disruptions from the Ukraine-Russia conflict, which affected input costs and energy prices, creating uncertainty. Regulatory developments also played a role, as proposed strict certification rules requiring 90% of wood fuel to be certified sparked concerns about potential supply constraints and cost increases before the decree was withdrawn.

Underlying this growth is Paraguay's heavy industrial reliance on wood fuel, which supplies nearly half of the sector's useful energy. This dependence has spurred detailed local studies, such as research into wood consumption for ceramic production in Tobatí, to assess and plan for the sustainable long-term use of the resource.

Production wood fuel in Paraguay

In kind, 2018-2021, K m³

Top producers of wood fuel, 2018-2021

World map of production of wood fuel, 2018-2021

Paraguay's wood fuel production has grown for the third consecutive year. In 2021, the country produced 7,819 thousand cubic meters of wood fuel, marking a slight year-on-year increase of 1.5%. From 2018 to 2021, production rose by 4.7%, which translates to an annualized growth rate of 1.5%.

Annual dynamics of production in Paraguay in kind, 2018-2021, K m³

In value, 2018-2021, M $ US

Wood fuel production in Paraguay has increased for the second year in a row. In 2021, the output was valued at 1,826 million US dollars, representing a 3.4% year-on-year rise. Over the period from 2018 to 2021, production grew by 3%, with a compound annual growth rate of 1.0%. The lowest value was recorded in 2019 at 1,735 million US dollars, and the largest decline occurred that same year, at 2.1%.

Annual dynamics of production in Paraguay in value, 2018-2021, M $ US

Exports wood fuel from Paraguay

Exports in kind, K m³

Following a two-year decline, wood fuel exports from Paraguay have rebounded. In 2021, the country exported 205.4 thousand cubic meters of wood fuel, reflecting a significant increase of 35.6% compared to 2020. From 2018 to 2021, exports rose by 25.5%, with a compound annual growth rate of 7.9%. The lowest volume was recorded in 2020 at 151.5 thousand cubic meters, and the largest drop occurred in 2019, at 4.5%.

Annual dynamics of product's exports from Paraguay in kind, 2018-2021, K m³

From 2018 to 2021, the country structure of exports in kind remained highly diversified. The United Kingdom accounted for 13.3% of exports, Germany for 11.6%, and the United States for 10.4%, together making up only 35.3% of total flows. The remaining 64.7% was distributed among a wide range of smaller markets.

Structure of product's exports in kind by countries, 2018-2021

World map of product's exports from Paraguay in kind, 2018-2021

Exports in value, K $ US

After a two-year decrease, Paraguay's wood fuel exports have increased. In 2021, exports totaled 47,969 thousand US dollars, corresponding to a sharp uptick of 38.1% compared to 2020. Over the period from 2018 to 2021, exports grew by 23.5%, with a compound annual growth rate of 7.3%. The lowest value was recorded in 2020 at 34,741 thousand US dollars, and the largest decline occurred in 2019, at 8.0%.

Annual dynamics of product's exports from Paraguay in value, 2018-2021, K $ US

The partner structure of exports in value terms from 2018 to 2021 remained fragmented. The United Kingdom held 17.3% of exports, the United States 11.8%, and Germany 10.8%, together accounting for only 40.0% of total flows, with no single country dominating the market.

Structure of product's exports in value by countries, 2018-2021

World map of product's exports from Paraguay in value, 2018-2021

Imports wood fuel to Paraguay

Imports in kind, K m³

The market showed volatility during these years. Imports reached their lowest point in 2020 and peaked in 2019, with a 2.3-fold difference between these years. In 2021, cross-border shipments of wood fuel to Paraguay amounted to 2.3 thousand cubic meters, representing a steep increase of 51.8% compared to 2020. The minimum value was recorded in 2020 at 1.5 thousand cubic meters, while the maximum was in 2019 at 3.5 thousand cubic meters. The largest decline occurred in 2020 at 56.1%, and the largest increase was in 2019 at 81.7%.

Annual dynamics of product's imports to Paraguay in kind, 2018-2021, K m³

From 2018 to 2021, Argentina, Brazil, and Indonesia formed the main cluster of markets for imports in kind. Argentina accounted for 38.4% of imports, Brazil for 29.3%, and Indonesia for 24.6%, together representing 92.3% of total flows.

Structure of product's imports in kind by countries, 2018-2021

World map of product's imports to Paraguay in kind, 2018-2021

Imports in value, K $ US

After a two-year decline, Paraguay's wood fuel imports have increased. In 2021, import volume reached 554 thousand US dollars, amounting to a sharp rise of 41.0% compared to 2020. Between 2018 and 2021, imports decreased by 54.3%, equating to an annualized rate of decline of 23.0%. The lowest value was recorded in 2020 at 393 thousand US dollars, and the largest drop occurred that same year, at 64.1%.

Annual dynamics of product's imports to Paraguay in value, 2018-2021, K $ US

Throughout 2018 to 2021, Indonesia, Brazil, and Argentina formed the core of imports in value terms. Indonesia accounted for 54.7% of imports, Brazil for 19.7%, and Argentina for 11.1%, together taking 85.5% of total flows.

Structure of product's imports in value by countries, 2018-2021

World map of product's imports to Paraguay in value, 2018-2021