Can Native Tree Species Plantations in Panama Compete with Teak Plantations? An Economic Estimation

background

Panama has high rates of primary forest conversion, resulting in depleted timber resources. In response, the timber plantation industry is growing to meet demand, often with non-native species. This study compares the economic feasibility of using native tree species vs non-native species for plantation forestry.

research goals & methods

In the Pacific Coast region, plantations of different native and non-native tree species were established and harvested after 25 years. Post-establishment treatments included pruning and thinning. The financial results were analyzed using Net Present Value (NPV) Analysis, with a sensitivity analysis conducted on the NPV as well as the internal rate of return.

conclusions & takeaways

The study found that the financial profitability of two of the native species plantations was higher than the non-native species, and overall all returns on native species were comparable to the returns on non-native species. The study makes the argument for native species to be considered alongside non-native species for use in commercial plantations.