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07/12/2016

Latin American exports to EU drastically fall

Development Policy

Latin American exports to EU drastically fall

A smallholder coffee farmer in Colombia's southwestern Cauca department.

[CIAT/Flickr]

Exports from Latin America and the Caribbean will fall roughly 14% this year to $914 billion (€829 billion) as a result of sharply lower commodity prices and anaemic international demand, according to the Inter-American Development Bank.

Exports to the EU declined even more, by 18%.

The forecast of a third consecutive annual drop in the region’s exports is included in the IDB’s “Latin American and Caribbean Trade Trend Estimates 2016,” released yesterday (14 December).

>>Read: South American presidents ‘confident’ of EU trade deal

Oil-exporting countries are among the hardest hit.

Venezuela, with a 49% decrease in the value of its exports, and Colombia, down 35%, are faring the worst, followed by Bolivia, 32%; Ecuador, 28%; and Trinidad and Tobago, 27%.

Only El Salvador, with a 2% increase, and Guatemala, up 6%, are seeing export gains thanks to a robust expansion of sugar sales to China.

>>Read: EU programme seeks to boost exports to Japan

By sub-regions, South America and the Caribbean face declines of 21% and 23%, respectively, compared with a drop of roughly 7% for Central America.

The data reflect a fall of between 20% and 25% in the prices of goods such as coffee, sugar and soy, and a 50% plunge in the price of crude oil and iron, the IDB said.

The report also pointed to the slowdown in the global economy, resulting in declines of 18% in exports to the European Union, 14% to China and 19% in intra-regional trade.

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