The value of exports of goods from Latin America and the Caribbean will end 2020 with a contraction at a rate between -11,3% and -13,0%, after having fallen 2,3% in 2019, according to data published today (17.12.2020) by the Inter-American Development Bank (IDB).
El report He points out that, although there has been an upturn in the region's external sales since June, the value of exports has not yet reached the pre-pandemic level and, looking ahead, the recovery remains subject to significant factors of uncertainty.
In the year that is ending, the decline in global demand has led to a reduction in export volumes, and prices have also fallen during the crisis.
The report indicates that the effect of the pandemic leads to the decline in value of goods exports was widespread across all subregions. The IDB projects a 12,4% drop in foreign sales in South America, 14,4% in Mexico, 5,7% in Central America and 18,9% in the Caribbean.
Also, the report highlights that all major destinations of the region's exports acted as contraction factors, except for China. Extra-regional trade flows, particularly those directed to the United States, were the ones that contributed most to the contraction.
The study predicts that total imports in the region will fall by 19% in 2020, highlighting the contraction of economic and commercial activity due to the health crisis and government policies to contain it.
Along these lines, the text indicates that the costumes of Latin American exports will register an estimated 10,4% year-on-year drop in 2020, after growing 0,9% in 2019.
In relation to Prices In 2020, the report explains that the contraction in global demand put strong downward pressure on the value of the main commodities exported by LAC, particularly energy products. Thus, the price of oil experienced a year-on-year drop of 33,5% in the period January-October 2020. Also, copper registered a fall of 1,5% in the cumulative period January-October 2020 compared to the same period of the previous year. Meanwhile, the average price of iron ore was 7,9% higher than the level of the same period of the previous year.
The Farm products had comparatively better performances in the context of the pandemic. The price of coffee stagnated (0,1% year-on-year) between January and October; while the price of sugar fell 2,3% during the critical phase of the pandemic due to lower demand for consumption due to the crisis and the drop in ethanol production caused by the collapse in the price of oil.
Finally, the value of the Soybeans rose 2,5% between January and October above the level corresponding to the same period in 2019. Grain was one of the agricultural products least impacted by the health crisis and in October the price was 15% above the January level. Increased demand in China, droughts in some South American exporting countries and widespread optimism in the markets have driven soybean prices to levels not seen since 2014.
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