Organizing this conference in conjunction with our board meeting allowed members to network and share expertise with the Mexico industry; through our joint meeting SEC has been able to investigate long term opportunities for U.S. softwoods in lumber and value-added building materials, meanwhile developing relationships with importers as potential partners and promoters of U.S. softwoods.
Beginning with an overview of Mexico’s major statistics delivered by Julio Maldanado of Mexico City’s Agricultural Trade Office, the meeting also included an overview of Mexico’s wood import market from Everado Martinez Salazar, and a look at the latest trends in Mexico’s academic sector. This collaboration with IMEXFOR was particularly eye-opening in detailing the international competition present in the Mexico market, as well as opportunities and obstacles for U.S. softwood products. Feedback from IMEXFOR members is included below:
Mexico is the world’s 14th largest landmass, sharing a 1,860 mile border with the U.S. that contains 63 crossings. Each year, Mexico’s need for wood increases, with most of the lumber entering Mexico from the U.S. used for furniture manufacturing and packaging material. There are few examples of softwoods in construction, including OSB roofing supported by inexpensive steel beams. IMEXFOR’s representatives advised members to find a niche in order to introduce lumber to construction—perhaps low-income housing would be the best way to enter the structural market.
According to IMEXFOR members, the Mexican market doesn’t feel comfortable with the U.S.’s inability to accommodate exchange rates. Price is a well-documented obstacle in the Mexican market, as the peso fell 49% against the U.S. dollar within the past 5 years—and at an even faster rate in 2016. However, Chile and Brazil are said to discount 5% to adjust for exchange rates, and Mexico is negotiating an elimination of vat taxes of Brazilian imports.
Perhaps one of the biggest hindrances to trade is a misunderstanding of U.S. dimensions—for instance when ordering U.S.
2 x 4s, Mexican importers become frustrated when they discover the true dimensions are 1.5 x 3.5. IMEXFOR members explained that they can get what they ask for with other countries, and Chile is more flexible customizing for Mexico’s need (25mm x 6, 8, and 10” rough). Mexican importers also struggle to find U.S. lumber that isn’t kiln dried.
Although Mexico imports from Chile and Brazil for softwood lumber due to market communications, language and culture, importers prefer U.S. supply because of its quality and reliability. Proximity is another perk: shared railways mean fast, inexpensive shipping. Additionally, it’s much easier for Mexican importers to obtain credit with the U.S., and IMEXFOR members particularly appreciated that American exporters do what they say they will, and shipments always arrive at the agreed upon time.
Continued engagement with IMEXFOR is crucial to maintaining our relationships, fostering greater collaboration, and creating more opportunities to do business within the Mexican market. More information on Mexico can be found through our membership-accessible Statistics & Reports downloads.