Argentina: Risks and opportunities for 2025 paper products market

The Argentinian paper products market presents a complex outlook for 2025 and 2026, characterized by distinct dynamics in its packaging and printing & writing (P&W) segments after a weak 2023-2024 period.

While the overall macroeconomic context poses significant challenges, the market also reveals opportunities for growth and adaptation, as disclosed in our Latin American Pulp & Paper 5-Year Forecast.

Domestic resilience is a double-edged sword

The containerboard market fell by 8.8% in 2023 and is expected to decline by almost 20% in 2024, following the strong reliance on the domestic market, which is different from that seen in other Latin American countries, such as Colombia, Peru and Ecuador. That reliance often provides some support from external economic shocks and volatility on food exports and highlights the strength of the internal market and purchasing power for Argentinians.

Packaging paper production has declined by more than 12% year-to-date up to August, according to data from the Local Pulp and Paper Producers Association (AFCP), tracking precisely the weaker consumption.

It is precisely that resilience that should pose a significant opportunity for growth and recovery in the coming years, driven by local consumption, as the economic crisis seems to have hit bottom. We project an increase of 9.8% on average per year between 2025 and 2026 for the domestic containerboard, recovering part of the demand loss in the 2023-2024 crisis but not enough to put the country back to the pre-crisis levels.

For the non-containerboard packaging paper, demand recovery should be smoother at a 4% average rate between 2025 and 2026, mainly because the demand loss in 2023 and 2024 was not as significant as in the containerboard market. This reflects precisely the strong purchasing power of Argentinians compared to other Latin American nations and also the firm resilience in the domestic market.

While facing an overall decline, the P&W segment is not expected to pose a recovery trend in 2025 and 2026, tracking the secular demand decline and shift into purchasing habits and consumer trends. Consumption will decline by 3.8% on average in the next two years. Still, Argentina is one of Latin America’s most robust reading countries, with literacy and book consumption average above the rest of the region and like mature economies. However, as the crisis approached, people naturally prioritized essentials first, accelerating the shift to digital in the country and posing a possible permanent demand loss for the P&W markets.

Challenges for the future

Persistent high inflation, driven by public spending and monetary emissions, creates economic instability, impacting consumer purchasing power and business investment decisions. This poses a significant challenge across all sectors, including paper.

The difficult trade-off between controlling inflation and supporting social welfare further complicates the economic landscape. Government efforts to control spending through austerity measures negatively impact sectors like education and public administration, which are traditionally significant consumers of P&W products.

The global shift towards digital platforms and communication severely impacts demand for printed materials, posing an existential threat to the P&W segment. The increasing share of digitally published books exemplifies this trend.

Due to inflation and economic uncertainty, declining purchasing power leads consumers to prioritize essential spending, impacting demand for non-essential items, including certain paper products.

Summary: There is a bright future ahead for Argentina, although challenges are not small

The Argentinian paper products market presents a mixed outlook. The packaging segment, driven by domestic demand and a positive business environment, exhibits strong potential for growth. However, due to digitization and economic pressures, the P&W segment faces significant challenges. Successfully navigating these challenges requires strategic adaptation, innovation and focusing on niche markets. The overall market’s success hinges on the country’s ability to address macroeconomic challenges and foster a stable and predictable business environment.

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