JAMAICA spent US$2.24 billion on imported raw materials in 2025, a 10.5 per cent increase that has renewed debate over which production inputs can realistically be supplied locally without raising costs or weakening competitiveness.

The raw material bill accounted for nearly 30 per cent of the country’s US$7.52-billion merchandise import bill.

Manufacturers say many imported inputs remain indispensable because Jamaica cannot yet supply them in sufficient quantity, quality or at competitive prices. But industry and research leaders argue that targeted investment in agriculture, renewable energy, scientific research, and local supply chains could reduce some of the country’s exposure.

Data from the Statistical Institute of Jamaica (Statin) show that the 2025 increase was driven partly by higher spending on industrial supplies, which rose 13.5 per cent to US$1.2 billion, largely because of increased imports of inorganic chemicals.

The figure reflects Jamaica’s extensive use of imported intermediate goods — raw materials, components and semi-finished products used in manufacturing and other production processes. These include metals such as iron and steel, grains including corn and wheat, chemicals, industrial machinery parts, packaging materials and various production inputs sourced primarily from countries such as the United States, China and Japan.

Although spending on raw materials during the first two months of 2026 declined by 6.8 per cent to US$333.4 million, helping to temper total imports of US$1.2 billion, concerns remain elevated as exports during the same period fell sharply by 28.9 per cent to US$217.7 million.

According to public commentator Ralston Hyman, the figures highlight a growing imbalance that could become increasingly difficult for the country to sustain.

“We cannot continue in a situation where the total value of all our exports is below the value of the raw materials that are being imported to produce those exports,” he said during a recent interview with the Jamaica Observer.

Imported intermediate goods also support production for the domestic market, construction, tourism and other sectors, meaning the comparison is not a direct measure of the cost of producing Jamaica’s exports.

Hyman said that if the current pattern persists, Jamaica’s trade deficit will continue to widen, placing an even greater strain on the country’s foreign exchange earnings and reserves.

In 2025, Jamaica recorded a merchandise trade deficit of US$5.87 billion, with imports of US$7.52 billion against exports of US$1.65 billion.

HYMAN…We cannot continue in a situation where the total value of all our exports is below the value of the raw materials that are being imported to produce those exports

“It means that the trade deficits are going to get wider and wider,” Hyman said. “Given that tourism and other foreign exchange earners are already facing pressures from global developments, including higher energy costs, the problems in the external account will get deeper and deeper.”

He pointed to the recent decline in Jamaica’s foreign exchange reserves as a warning sign.

“If you notice that the reserves dropped by US$454 million in one month, that’s a very dangerous development,” Hyman said, referring to the decline recorded in April.

The challenge is particularly evident in manufacturing, where imported raw materials remain critical to production.

According to Jamaica Manufacturers and Exporters Association President Kathryn Silvera, key imports used by the productive sector include petroleum products and industrial fuels, chemicals, food-processing inputs, construction materials, machinery components, textiles and packaging materials such as cardboard, paper, aluminium, glass, and plastics.

“The manufacturing sector continues to rely on imports for many inputs because of limited local availability, insufficient production scale and cost competitiveness challenges,” Silvera said.

Despite growing interest in reducing import dependence, she added that overseas inputs remain essential to production across many industries. Manufacturers are nevertheless seeking to strengthen local and regional supply chains.

“These efforts include sourcing more inputs from within Caricom, building stronger relationships with local farmers and exploring alternative raw materials where commercially viable,” she told the Business Observer.

As manufacturers seek to build resilience amid global supply disruptions, geopolitical tensions and volatile commodity prices, industry leaders caution that meaningful import substitution can only occur where local production can consistently meet quality, quantity and price requirements.

Hyman said research and innovation must play a larger role in developing local substitutes for imported materials, arguing that reducing foreign exchange spending is just as important as increasing export earnings.

“If we cannot earn more foreign exchange, then we have to reduce the amount of foreign exchange we are spending,” Hyman said.

He said agriculture, renewable energy and scientific research should be prioritised because all three offer opportunities to reduce dependence on imported inputs.

“We have to start somewhere and the Scientific Research Council (SRC) has to play a more important role in identifying viable local alternatives,” Hyman said.

Executive director of the SRC Dr Charah Watson said the organisation is already positioning itself to support manufacturers through initiatives aimed at identifying areas where local resources can competitively replace imported inputs.

In addition to testing agricultural substitutes, the SRC, through its Integrated Environmental Solutions Unit, is examining the potential for bioplastics, waste-to-value technologies and renewable materials that could eventually reduce the need for imported products and industrial inputs. The organisation is also expanding partnerships with universities and research institutions to strengthen expertise in sustainable materials and circular-economy technologies.

The search for alternatives has become even more important as petroleum products remain among Jamaica’s largest import categories, prompting calls for a faster transition to renewable energy. Stakeholders have long argued that reducing the country’s dependence on imported fuel would not only lower energy costs but also significantly reduce the overall import bill.

Watson said Jamaica’s expenditure on R&D, estimated at 0.07 per cent of gross domestic product (GDP), remains well below the level needed to support greater innovation and competitiveness.

She said the Government’s recently announced House of Innovation strategy aims to increase R&D expenditure to 1.5 per cent of GDP over the next decade, although talent shortages and the migration of skilled professionals remain constraints.

As the raw material bill rises, Jamaica faces the challenge of turning more of its natural resources, scientific expertise and entrepreneurial capacity into locally produced inputs that can compete on price, quality and scale.

Hyman and Watson agree that reducing import dependence will require an all-hands-on-deck approach involving Government, academia, researchers and the private sector.

While Watson expects ongoing investments in innovation and entrepreneurship to generate new products and niche export opportunities over the next few years, Hyman believes there are also immediate actions that can deliver results.

“Outside of the low-hanging fruits, what I think the Government must do now in terms of a quick response to reducing the raw materials bill is to use National Reconstruction and Resilience Authority (NaRRA) to focus on projects that are related to cutting the energy bill by looking deeper at renewables and, in terms of food, investing more in agriculture and R&D,” he said.

SILVERA…The manufacturing sector continues to rely on imports for many inputs because of limited local availability, insufficient production scale and cost competitiveness challenges.