Development of the Peruvian economy through wood product exports

Expanding Peruvian wood product exports would enhance the forestry and forest industries contribution to national development and welfare. Such prospects are examined from an economic standpoint. The subject is divided into three major areas as: Potential of the forest resources and forest industries; Current and projected export markets; and Opportunities for forest industrial development. In the first area, underlying problems and potential are examined. Forests as percentage of total land, composition by species, product mix, forest industries, harvesting and marketing problems are described. Most significantly, the heterogeneous nature of the Peruvian tropical forests, the selective harvesting practices, forest industries idle capacity and high ocean freight rates are identified as negative forces to further development of the forestry sector. In the second area, the location and potential size of export markets, cost of delivering wood to these markets, opportunities and constraints imposed by export policies on increased wood product exports, and balancing of exports with projected domestic wood products requirements are examined.. Given the species composition and product mix of the Peruvian forest industries it is found that there are enormous international markets available for sawn wood and wood-based panels. The cost of delivering wood product to export markets is identified as providing a comparative advantage. Balancing of exports with projected domestic wood products requirements shows that there is a considerable surplus of industrial roundwood. Finally, in the third area, implications of increased wood export activity and impact of an expanded wood product export programme on the forest resources sector and on the Peruvian economy are evaluated. Impacts would be closer utilization of o currently unutilized or underutilized forest resources, expansion of the number of species in domestic and export markets, organization of a strong logging industry, modernization and/or relocation of old plants and consolidation of new plants, utilization of the current forest industry surplus capacity, growth of income and attraction of foreign exchange, creation of employment opportunities , development of rural areas, generation of public revenue and other economic and social benefits. It is concluded that, in spite of negative factors, Peruvian forest resources and forest industries have the potential to make a great contribution to the nation's economy through expanded wood products production and export. There are excellent opportunities for expanding wood product exports from Peru. There is a possibility for improving the comparative advantage by reducing freight rates. Peruvian forests can support an expanded wood product export programme, and this programme should have a vigorous impact on the forest and forestry sectors and on the Peruvian economy.Forestry, Faculty ofGraduat