Country Profiles

Access to latest commentary on timber industries and economies of EU&UK and VPA partner countries

VPA COUNTRY

Honduras

VPA Status: VPA Awaiting Ratification

vpa status history
  • Honduras was the first Latin American country to initial a VPA with the EU in 2018. Implementation will begin once the Agreement has been ratified.
  • The VPA has been characterized by broad stakeholder engagement, including public and private sectors, civil society and, in a FLEGT VPA first at the time, indigenous peoples’ groups.
  • The VPA includes in its legality definition an indicator stating that the Forest Institute will respect the right to free prior and informed consultation in the territories of the Indigenous and Afro-descendant Peoples of Honduras where commercial timber harvesting is intended to take place and by which those Peoples are directly affected.
  • The timber legality assurance system will be based on Honduras’ existing national strategy against illegal logging (ENCTI).
  • Honduras has expressed an explicit desire to use the VPA to increase transparency in the forest sector. The Honduras VPA includes an annex on public disclosure of information that lists the information the government commits to making publicly available.
  • The Voluntary Partnership Agreement (VPA) was signed on 23 February 2021. It will enter into force after each Party has ratified it in line with their internal procedures.
  • Honduras is the first Latin American country to sign a voluntary partnership agreement with the EU under the Action Plan on Forest Law Enforcement, Governance and Trade (FLEGT).

Forest Resources

Forest area (2020) 6.359 mil. ha
Deforestation rate (2010-2020) -21,600 ha/year
Planted area (2020) 0 ha
Tree cover loss (2001-2020) -1.19 mil. ha (-1.2 %)
Tree cover gain (2001-2012) 58,300 ha
FSC certified area (August 2021) 16,639 ha
PEFC certified area (August 2021) 0 ha
Double certified area (FSC & PEFC, August 2021) 0 ha

Source: FAO, Global Forest Watch, FSC, PEFC

  • FAO estimated the total forest area in Honduras at 6.36 million hectares in 2020, from a total land area of 11.19 million hectares.
  • Deforestation averaged 20,910 hectares per year between 2015 and 2020 according to FAO, an annual rate of 2.2%, the highest rate in the Americas. Demand for land by small-scale farmers is thought to be the major cause.
  • According to the Honduras Institute for Forest Conservation, Protected Areas and Wildlife (ICF), 500,000 hectares of softwood woodland have been destroyed by insect infestation since 2015.
  • According to ITTO’s 2011 Status of Tropical Forest Management report, at that time Honduras’ central highlands and the Mosquito Coast savannahs had nearly 2 million hectares of pine and mixed forests, while about 3.5 million hectares of broadleaved forests covered much of the Caribbean coast, the Agalta mountains and the eastern lowlands.

Industry

GDP (2020) 23,827.84 million USD
Population (2020) 9.91 million
Income group (2020) Lower middle income
Ease of Doing Business (EDB) Rank (2020) 133 / 190
Global Competitiveness Index Rank (2019) 101 / 141
Liner Shipping Connectivity Index (maximum value in 2004 = 100) (2019)
9.2

Source: World Bank, World Economic Forum

Timber Industry Competitiveness

  • The Honduras forest products sector is dominated by micro, small and medium-sized businesses.
  • Honduras’ ranking on international competitiveness indices is low and has declined in recent years. Ranking on the World Economic Forum’s Global Competitiveness fell from 88th in 2017 to 101st in 2019. Honduras Ease of Doing Business ranking fell from 105th in 2016 to 133rd in 2020. The country’s connectivity is low (13.4) on the 2019 Global Liner Connectivity Index.
  • According to the European Support to Honduras Forestry Sector (EUROFoR) project, centralized bureaucracy has undermined the competitiveness of this sector with illegal logging activities escalating the problem, while extended droughts, due to changing climatic conditions, have contributed to forest degradation, with the expansion of epidemic infestations being the most prominent challenge.
  • Nevertheless, according to ICF, the Honduras forest products sector produces around 700,000 m3 of logs each year and annual export earnings of US$66 million. In the six years 2013 to 2018, the sector created over 100,000 jobs, while 236 community forest management contracts were issued.

Trade Overview

  • According to the ITTO Biennial Review, national log production was stable at around 770,000 m3 in 2017 and 2018, a rise from 710,000 m3 in 2016. Log production decreased to 600,000 m3 in 2020. Honduras has implemented a ban on exports of unprocessed roundwood and squared logs.
  • Annual sawnwood production was stable at around 306,000 m3 in 2017 and 2018, up from 259,000 m3 in 2016, according to ITTO. Sawnwood production decreased markedly to 129,550 m3 in 2020. A large proportion of sawnwood is exported. Sawnwood exports were 175,000 m3 in 2017 and 2018, a rise from 148,000 m3 in 2016 and only 74,000 m3 in 2014. Sawnwood exports decreased markedly to 42,820 m3 in 2020.
  • Honduras produces small volumes of plywood, estimated by ITTO at around 49,000 m3 per year between 2016 and 2020. Plywood exports were no more than around 6-10,000 m3 per year during this period and most production was consumed in the domestic market.
  • There was negligible production of veneer in the country between 2014 and 2018.

Imports

  • In 2020, Honduras imported timber and paper products with total value of US$323 million, down from US$337 million in 2019.
  • Key trading partners in 2020 were USA (US$96.4 million – 30% share of the total value of imports); El Salvador (US$70.5 million – 22%); and Guatemala (US$57.9 million – 18%). Imports from the EU27+UK in 2020 amounted to US$13.8 million (4% share of the total).
  • Over 84% of Honduras timber product imports comprise paper products. In 2020 the value of these products amounted to US$292 million, a decline from US$327 million in 2019.
  • US$92 million paper product imports into Honduras derive from the United States, with most of the remainder from Latin American countries including El Salvador, Guatemala, and Mexico.
  • In 2020, Honduras imports of secondary processed wood products were stable in value terms, at around US$23.8 million. Imports from Guatemala have consistently grown in value post-2015, amounting to US$14 million in 2020.
Honduras’s imports by product group (data source: STIX)
Honduras’s leading import product flows (data source: STIX)

Exports

  • , In 2020, Honduras exported timber and timber products with total value of US$113 million, down from US$155 million in 2019.
  • Costa Rica has been the largest trading partner since 2015 with exports of US$31.6 million (28% of total export value) in 2020. The other major trading partner is USA with exports to the value of US$27.6 million (24.4%) in 2020. EL Salvador continues to be a significant export market, amounting to US$8 million in 2020 (7.1%).
  • A large proportion of Honduras timber product exports comprise paper products. Between 2019 and 2020 exports of these products decreased from US$84.4 million to US$62.5 million.
  • Costa Rica remained the main paper export market in 2020, with a value of US$31.6. Honduras exports of paper to the US were flat between 2015 and 2020, in the region of US$7 million per year. Exports of paper to Panama fell sharply from around US$20 million in 2018 to negligible levels in 2020. 
  • In 2020, Honduras exported US$16 million of sawnwood, down from US$23.6 million in 2019. EL Salvador was the major market in 2020 with exports amounting to US$7.3 million (down from US$9.5 in 2019). Other significant regional markets are Jamaica, Saint Lucia and Panama. 
  • The value of sawnwood destined for the USA grew to US$1.9 million in 2020 from US$1.7 million in 2019.
  • Honduras’s wood furniture exports amounted to US$12.3 million in 2020, falling from US$17.9 million in 2019. Most wood furniture exports are destined for the USA (US$11.3 million in 2020), with smaller volumes destined for Canada and El Salvador.
  • Exports of secondary processed wood products are dominated by USA (US$7.2 million in 2020). Other key markets are within Central America.
Honduras’s exports by product group (data source: STIX)

EU+UK Imports from Honduras

  • The EU27+UK are a minor market for Honduras, accounting for less than 2% of total export value in 2020.
  • In 2020 EU27+UK imports of timber and timber products from Honduras amounted to US$1.7 million, a 30% gain compared to US$1.3 million in 2019 (but a significant decline compared to over US$5 million in 2014 and figures of close to US$ 7 million before the financial crises).
  • EU27+UK imports from Honduras comprise mainly sawnwood (US$0.8 million in 2020), with small amounts of secondary processed wood products (US$0.4 million) and paper.
  • EU27+UK sawnwood imports from Honduras comprise mainly pine with a small quantity of mahogany and other hardwoods.
  • EU27+UK imports are mainly into France (US$0.4 million); Belgium (US$0.3 million); Germany (US$0.3 million); UK (US$0.2 million) and Spain (US$0.1 million).
EU+UK imports from Honduras by product group
(data source
: Eurostat COMEXT)
EU+UK imports from Honduras by destination
(data source
: Eurostat COMEXT)

Data Sources and Issues

  • The statistics shown in this IMM report draws on export data from UN COMTRADE together with import data for major timber trading partners in the EU, Asia and America from COMTRADE, Eurostat COMEXT, and national statistics from Business Trade Statistics Ltd. The data is also made available at www.stix.global and www.immstats.org