Chile and Uruguay: big mills, small countries

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Chile made 5.9 million tons of pulp in 2024 and Uruguay made 4.2 million tons, according to FAO. Uruguay's own customs filing to the UN lists one pulp entry for 2024, worth $52,244. This post explains who buys the pulp, which mills make it, and how a free zone changes the numbers.

Published October 27, 2026 · Facts as of October 27, 2026 · 12 min read · Sources listed at the end

Facts as of October 27, 2026. This page states the facts as they stood on that date. Figures, rules and company plans may have changed since publication. We review this guide every six months and update the pages.

5.9 million tonsChile's pulp production in 2024, as estimated by FAO ¹

4.2 million tonsUruguay's pulp production in 2024, FAO ¹

64.5%Share of Chile's 2025 pulp exports that went to China, as reported by Chile ²

$52,244The only pulp entry in Uruguay's own 2024 filing to the UN, against 4.1 million tons of exports in FAO data ^1,2

The 60-second version

What is it?

Chile and Uruguay export most of the pulp they make, and China is the largest buyer in the trade data we use for both. Chile's plantation subsidy began in 1974 ³. Uruguay passed a forestry law and a free zone law in December 1987 ^9,10.

Why does it matter?

Uruguay's three pulp mills sit inside free zones. Uruguay's own UN customs filing shows almost no pulp, so a trader who reads only that filing sees almost no pulp trade. Our reading is that free zone shipments are missing from it ^2,16,18.

How does it work?

For Chile, use Chile's own filing. For Uruguay, use FAO for the total and the buyers' filings for destinations. China's customs recorded 1.64 million tons from Uruguay in 2024 ^1,2.

Myth or fact?

"Uruguay sells very little pulp, because its customs data show almost none."

See the answer

Myth. FAO records 4.1 million tons of pulp exports from Uruguay in 2024 ¹. China's customs alone recorded 1.64 million tons from Uruguay in that year ². Uruguay's own filing to the UN lists one pulp entry, worth $52,244 ².

In this post

1. How much pulp do Chile and Uruguay make?
2. Which laws support planted forests in these two countries?
3. Who buys Chile's pulp?
4. Which mills make the pulp?
5. How does a pulp export from a Uruguayan free zone work?
6. What do the two sets of numbers show for Uruguay?
7. How were these mills financed, and what should a buyer check?

01How much pulp do Chile and Uruguay make?

Both countries are large exporters of pulp. FAO records that Chile made 5.9 million tons of wood pulp in 2024 and Uruguay made 4.2 million tons ¹. Chile exported 5.2 million tons and Uruguay exported 4.1 million tons. That is 87.7% of Chile's production and 99.5% of Uruguay's, our calculation from FAO ¹.

Uruguay's output grew fast. FAO records 34,000 tons in 2005, 1.1 million tons in 2010 and 4.2 million tons in 2024 ¹. One documented reason is new mills: UPM Fray Bentos received its environmental authorization to operate in November 2007, Montes del Plata was inaugurated in September 2014, and UPM Paso de los Toros started up in April 2023 ^14,15,13. From 2022 to 2024 Uruguay's FAO export figure rose 53%, from 2.7 to 4.1 million tons ¹.

Compare

Chile and Uruguay side by side

Sources as marked. FAO figures are for 2024. Shares are our calculation.

Item	Chile	Uruguay
Pulp production, 2024 (FAO)	5.9 million tons 1	4.2 million tons 1
Pulp exports, 2024 (FAO)	5.2 million tons 1	4.1 million tons 1
Exports as a share of production	87.7%	99.5%
Planted forest	About 3.3 million hectares in 2019, all uses 5	About 1.1 million hectares, December 2025 11
Plantation law	Decree Law 701, October 1974, 75% subsidy 3	Forestry Law 15,939, December 1987 9
Pulp mills named in sources	Arauco Horcones; CMPC Laja, Santa Fe, Pacífico 8,19	UPM Fray Bentos, Montes del Plata, UPM Paso de los Toros 13,14,15
Pulp in the country's own UN filing	5.4 million tons exported in 2025 2	One entry in 2024, $52,244 2
China's share	64.5% of exports, 2025, Chile's filing 2	1.64 million tons in 2024, China's filing 2

02Which laws support planted forests in these two countries?

Both countries have laws that support planted forests. In Chile, Decree Law 701 was issued in October 1974. It paid a 75% subsidy for pine and eucalyptus plantations ³. A later budget office evaluation describes the subsidy as 75% of net costs for medium and large producers and 90% for the first 15 hectares of small owners ⁴. Press reports citing the forestry agency CONAF say that from 1998 to 2014 large companies received $28 million, about 6% of the total ³. CORMA, the forestry industry body, counted about 2.5 million hectares of company plantations and about 800,000 hectares held by small and medium owners in 2019 ⁵. Arauco alone reports 607,000 hectares in Chile ⁷.

Uruguay passed two laws within eleven days. Forestry Law 15,939 of December 28, 1987 declares forest resources of national interest and exempts forests on priority soils from several taxes ⁹. Free Zone Law 15,921 of December 17, 1987 exempts free zone users from national taxes on the activities the law covers ¹⁰. Uruguay has about 1.1 million hectares of planted forest. Planting has slowed to about 20,000 hectares a year, and the producers' association says it wants to plant faster ¹¹.

Chile's plantation area is also under pressure. CORMA's president said in April 2024 that plantations had fallen 14%, and he named fires, timber theft and land seizures as causes ⁶. No source we found gives the current status of the plantation subsidy after Decree Law 701.

Chile's Decree Law 701 of October 1974 paid a 75% subsidy for pine and eucalyptus plantations ³.

03Who buys Chile's pulp?

China buys most of it. Chile reports 3.51 million tons to China in 2025, which is 64.5% of its 5.4 million tons of exports. In 2015 China took 1.75 million tons, 40.6% of Chile's 4.3 million tons ².

Sales to all other buyers fell. They were 2.57 million tons in 2015 and 1.93 million tons in 2025, a drop of 24.9%, our calculation from Chile's filing ². South Korea, the Netherlands and Taiwan each took between 0.2 and 0.4 million tons in 2025 ².

Chile ships both hardwood and softwood pulp. In 2025, bleached hardwood kraft was 54.7% of its exports, bleached softwood kraft 32.8%, dissolving pulp 7.0% and unbleached softwood kraft 5.6% ². China's own customs records 3.42 million tons from Chile for 2025, 2.5% less than Chile reports. See why countries' pulp numbers do not match for the usual causes. China's wider buying plans are in the China post.

Chart

Where Chile's pulp goes, 2015 to 2025

• China
• South Korea
• Netherlands
• Taiwan (UN label: Other Asia, nes)
• Rest of world

Million tons. Source: UN Comtrade, as reported by Chile; partner rows; weights that failed checks are left out. 2025 data may be revised.

04Which mills make the pulp?

In Uruguay, three eucalyptus mills make the pulp. UPM Fray Bentos makes 1.3 million tons a year ¹⁴. Montes del Plata, a joint venture of Arauco and Stora Enso (50% each at its 2014 opening), had a capacity of 1.3 million tons at that opening ¹⁵. Arauco's December 2025 presentation lists it at 1.44 million tons ⁷. UPM Paso de los Toros has a capacity of 2.1 million tons and cost $3.47 billion including a terminal at the Montevideo port ¹³. These three mills explain why new pulp mills are so big.

In Chile, Arauco's Horcones site gained a new line in 2023. Line 3 is designed for 1.56 million tons of eucalyptus pulp a year ¹⁹. Arauco's December 2025 presentation lists the Horcones mill at 1.56 million tons of hardwood pulp and 0.54 million tons of softwood pulp, about 2.1 million tons in all ⁷. CMPC lists the Laja, Santa Fe and Pacífico mills in Chile. Its pulp site puts Santa Fe in hardwood and Laja and Pacífico in softwood ⁸. No source we found gives CMPC's capacity per mill.

Arauco reports 5.1 million tons of current operating pulp capacity across the company ⁷. UPM has asked to raise Fray Bentos output from 1.3 to 1.5 million tons a year. That is a request only. The source reports no approval or start date ¹¹.

Chart

Annual pulp capacity of four mills

Million tons a year. Sources: UPM ^13,14; Arauco presentation for Horcones ⁷; Stora Enso release for Montes del Plata ¹⁵. Montes del Plata is 1.44 million tons in Arauco's December 2025 presentation ⁷. Chile in orange, Uruguay in green.

05How does a pulp export from a Uruguayan free zone work?

All three Uruguayan pulp mills sit in their own free zones. They are Zona Franca UPM Fray Bentos, Zona Franca UPM 2 at Paso de los Toros and Zona Franca Punta Pereira for Montes del Plata ¹⁶. Uruguay's government extended UPM's Fray Bentos free zone concession to April 14, 2053, as reported by a trade logistics outlet ¹².

Uruguay XXI, the government export agency, counted free zone exports of $4,268 million in 2022. That was 32% of Uruguay's goods exports, and pulp was $1,885 million of it ¹⁶. The figures below come from company data, not from customs declarations alone ¹⁷.

1. Wood enters the free zoneSales of raw materials by local firms to free zone firms appear in Uruguay's customs data as exports, the Ministry of Economy and Finance says ¹⁸.
2. The mill makes pulp inside itFree zone users are exempt from national taxes on activities under Law 15,921 ¹⁰.
3. Pulp leaves for the buyerUruguay XXI counts the export when goods leave for their destination, using company and port figures ¹⁷.
4. The buyer's customs records an importChina's customs recorded 1.64 million tons from Uruguay in 2024 ².
5. Uruguay's own UN filing shows almost nothingOne pulp entry in 2024, worth $52,244, to Brazil ².

06What do the two sets of numbers show for Uruguay?

China's customs recorded 0.87 million tons from Uruguay in 2015 and 1.64 million tons in 2024. In 2025 it recorded 1.80 million tons ². In 2024 that was about 40% of the 4.1 million tons FAO shows for Uruguay's exports to all countries, our calculation ^1,2. China took 5.5% of its 32.5 million tons of 2025 imports from Uruguay and 10.5% from Chile, as reported by China ².

No source we found says where the rest of Uruguay's pulp goes. Uruguay XXI says its free zone figures include final destinations from May 2024, but our data do not include them ¹⁷.

Why does Uruguay's own filing leave out pulp? No fetched source states it in so many words. The closest is the Ministry of Economy and Finance method note. It says goods that never enter Uruguay are not recorded by customs, and free zone exports are estimated separately ¹⁸. Our reading is that free zone shipments do not appear in the customs filing. Treat it as a reading until Uruguay confirms it.

Chart

Uruguay's pulp: FAO exports against China's imports from Uruguay

• Uruguay exports to all countries (FAO)
• China imports from Uruguay (China's customs)

Million tons. Sources: FAOSTAT item 1875 (to 2024) and UN Comtrade, as reported by China. Uruguay's own customs filing to the UN leaves out pulp, because the mills sit in free zones.

07How were these mills financed, and what should a buyer check?

Two earlier mills used export credit. For Arauco's MAPA project in Chile, Finnish Export Credit lent EUR 555 million, guaranteed by Finnvera, for 8.5 years ²⁰. For Montes del Plata, Finnvera guaranteed a 12-year, $900 million export credit inside about $1.35 billion of debt arranged with the Inter-American Development Bank ²¹. UPM said in 2019 that Paso de los Toros would be financed mainly from operating cash flow ²³. See financing a mega mill and ECA-backed finance in the Ossiano Trade Finance Guide. An export credit agency backs the lender's credit risk.

For a buyer, three checks matter. First, ask which customs series a Uruguayan figure comes from. Second, check the Incoterms rules and the payment terms on the contract. Third, check the rules. Chile and Uruguay are both on the EU low-risk list under the deforestation rules ²². Other duties change often, so see pulp watch. For how lenders read Political risk and buyer risk, see buyer, country and performance risk.

What this means for traders

• For Chile, use Chile's own filing, and note that China took 64.5% of its 2025 exports.
• For Uruguay, take the total from FAO and the destinations from the buyers' customs filings. Name the source each time.
• Check the mill, grade and capacity in company sources. Count capacity only after approval and construction. Until then a request is a request.

Questions traders ask

How much pulp does Chile produce?

FAO estimates Chile produced 5.9 million tons of wood pulp in 2024 and exported 5.2 million tons. Chile's own customs filing reports 5.4 million tons of pulp exports for 2025.

How much pulp does Uruguay produce?

FAO records that Uruguay produced 4.2 million tons of wood pulp in 2024 and exported 4.1 million tons. That is up from 1.1 million tons in 2010.

Who is the largest buyer of Chilean pulp?

China. Chile reports that China took 3.51 million tons in 2025, which is 64.5% of its pulp exports. In 2015 the share was 40.6%.

Why does Uruguay's customs data leave out pulp?

The three pulp mills sit in free zones. Uruguay's own filing to the UN lists one pulp entry for 2024. The Ministry of Economy and Finance says customs do not record goods that never enter Uruguay, so free zone exports are estimated separately. Our reading is that this is why the filing shows almost no pulp. Use FAO and the buyers' filings.

Is UPM's Fray Bentos mill getting bigger?

Not yet. UPM has asked to raise output from 1.3 to 1.5 million tons a year. The source reports no approval and no start date.

Read next

• Start hereWhy countries' pulp numbers don't match
• Inside the millWhy new pulp mills are so big
• Makers and buyersBrazil: can the largest pulp exporter keep growing?
• Makers and buyersChina: the largest buyer is building its own mills
• Money and rulesFinancing a mega mill
• Makers and buyersThe Nordics: Europe's pulp makers
• Ossiano Trade Finance GuideHow each trade finance instrument works
• GlossaryTrade finance terms in plain English

Buying or selling pulp from Chile or Uruguay? Ossiano Capital works on trade finance for pulp and paper trades.

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Sources and notes

1. FAOSTAT Forestry, item 1875 Wood pulp, production and export quantities for Chile and Uruguay, 1961 to 2024 (downloaded October 2026). https://www.fao.org/faostat/en/#data/FO
2. UN Comtrade, exports reported by Chile (HS 4702, 470311, 470321, 470329), 2015 to 2025; imports reported by China from Chile and Uruguay, 2015 to 2025; Uruguay's own 2024 filing. Rows with usable weights only; downloaded October 2026 and checked by us. https://comtradeplus.un.org/
3. BioBioChile, Decreto 701: el millonario bono gubernamental que financio a las grandes forestales, January 26, 2017. https://www.biobiochile.cl/noticias/nacional/chile/2017/01/26/decreto-701-el-millonario-bono-gubernamental-que-financio-a-las-grandes-forestales.shtml
4. Direccion de Presupuestos (DIPRES, Chile), institutional executive evaluation of the forestry subsidy, undated. https://www.dipres.gob.cl/597/articles-141195_r_ejecutivo_institucional.pdf
5. Infraestructura Publica / CPI Chile, CORMA propone forestar dos millones de hectareas a 2040, July 2019. https://cpichile.org/corma-propone-forestar-dos-millones-hectareas-2040-avanzar-hacia-la-carbono-neutralidad/
6. Radio Pauta, interview with Juan Jose Ugarte, CORMA president, April 11, 2024. https://www.pauta.cl/economia/2024/04/11/corma-por-crisis-del-sector-pedimos-una-ley-de-fomento-forestal-para-pequenos-propietarios-y-una-ley-de-incendios-que-nos-proteja.html
7. Arauco, Corporate Presentation, December 2025 (posted March 2026). https://arauco.com/wp-content/uploads/2026/03/2025.12-Corporate-Presentation.pdf
8. CMPC, Cellulose business page and CMPC Pulp site, read October 27, 2026. https://www.cmpc.com/en/this-is-cmpc/business/cellulose/
9. IMPO (Uruguay), Ley 15.939 (Ley Forestal), December 28, 1987. https://www.impo.com.uy/bases/leyes/15939-1987
10. IMPO (Uruguay), Ley 15.921 (Zonas Francas), December 17, 1987. https://www.impo.com.uy/bases/leyes/15921-1987
11. El Observador, La gran necesidad del sector forestal para crecer a otro ritmo, December 6, 2025. https://www.elobservador.com.uy/agro/el-sector-forestal-quiere-crecer-a-otro-ritmo-menos-burocracia-n6027084
12. The Logistics World, Uruguay extiende concesion a UPM hasta 2053 para operar en zona franca, July 22, 2023. https://thelogisticsworld.com/actualidad-logistica/uruguay-extiende-concesion-a-upm-hasta-2053-para-operar-en-zona-franca
13. UPM, UPM Paso de los Toros pulp mill ready for start-up, March 31, 2023; UPM Pulp, UPM Paso de los Toros off to a great start, August 11, 2023; UPM release of April 15, 2023. https://www.upm.com/news-and-stories/releases/2023/03/upm-paso-de-los-toros-pulp-mill-ready-for-start-up-major-milestone-in-the-transformative-growth-investment-in-uruguay/
14. UPM, UPM Fray Bentos Environmental and Societal Responsibility 2024 (EMAS statement), September 2025. https://www.upm.com/siteassets/reporting-hub/emas-reports/emas-report-2024---upm-fray-bentos-mill-english.pdf
15. Pulpapernews, Stora Enso inaugurates Montes del Plata pulp mill, September 10, 2014. https://www.pulpapernews.com/20190804/5778/stora-enso-inaugurates-montes-del-plata-pulp-mill
16. Uruguay XXI, Zonas Francas 2023: Informe Exportaciones de Bienes con Zonas Francas, July 2023. https://www.uruguayxxi.gub.uy/es/centro-informacion/articulo/exportaciones-de-bienes-con-zonas-francas-2023/?download=es
17. Uruguay XXI, Informe de Comercio Exterior, April 2025 and February 2025. https://www.uruguayxxi.gub.uy/uploads/informacion/9e5d5c9b048b90b725e964653e91c852e2d1a625.pdf
18. Ministerio de Economia y Finanzas (Uruguay), Contribucion a las exportaciones de las empresas de Zonas Francas, Metodologia de estimacion, September 2018. https://www.gub.uy/ministerio-economia-finanzas/sites/ministerio-economia-finanzas/files/2019-10/metodologia-de-calculo-de-exportaciones---direccion-general-de-comercio--area-zonas-francas.pdf
19. EUWID Pulp and Paper, Arauco starts up new pulp line, January 10, 2023; Valmet, Arauco's MAPA project produces the first pulp bale, January 25, 2023. https://www.valmet.com/insights/articles/pulp/araucos-mapa-project-makes-progress-and-produces-the-first-pulp-bale-from-its-new-production-line/
20. Finnvera, The pulp mill modernisation and expansion in Chile, guaranteed transaction, October 7, 2019. https://www.finnvera.fi/eng/export-and-internationalisation/finnvera-as-an-export-finance-provider/guaranteed-transactions/the-pulp-mill-modernisation-and-expansion-in-chile-is-one-of-the-largest-pulp-mill-investments-at
21. Finnvera, Finnvera covering export credit financing for Montes del Plata pulp mill project in Uruguay, September 30, 2011. https://finnvera.fi/eng/finnvera/newsroom/press-releases/finnvera-covering-export-credit-financing-for-montes-del-plata-pulp-mill-project-in-uruguay
22. EUR-Lex, Commission Implementing Regulation (EU) 2025/1093 of May 22, 2025, list of countries presenting a low or high risk. https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32025R1093
23. Bioenergy International, UPM invests US$3 billion in a world-class pulp mill in central Uruguay, July 2019. https://bioenergyinternational.com/upm-invests-us3-billion-in-a-world-class-pulp-mill-in-central-uruguay/

Trade figures come from UN Comtrade (2015 to 2025, as reported by 10 countries) and FAOSTAT (1961 to 2024), checked and recalculated by us; each chart names whose data it uses. All tons are metric tons. All facts on this page are as of October 27, 2026, the date of publication, and may have changed since. For rules and tariffs, check the pulp watch before you act.

About this post. Prepared for Ossiano Capital. People planned, researched, wrote and checked this post, using AI tools to help with research and checking. You are welcome to quote or reuse it: please credit Ossiano Capital and link to this page.