Colombia’s export industry contracted significantly during November 2014 compared to the same time last year, according to the latest statistics. If crude oil prices continue to be low, this decrease in revenue will continue in 2015.
The nation’s Finance Minister is not deterred however, confidently predicting a 9% expansion in the export sector during 2015.
November exports drop 22.6%
Exports dropped 22.6%, or from US $4,946 million to US $3,828 million, in November 2014 when compared to the same month in 2013.
The United States attracted over 25% of all Colombian exports, followed by China with 11% and Panama with 7% during November 2014.
Exports in the fuels and mining product industry were largely culpable, registering a 32.4% drop. The main culprits in fueling this decline were China and India, the former purchasing 82.6% less barrels of Colombian crude oil and the latter 43.5%.
Struggling exporters in the fuels and mining production industry were compounded by a notable dip in ‘other’ exports, most notably non-monetary gold which dropped close to 30% in the comparison period.
Curiously, Colombia’s fortunes in it’s two most notable agricultural exports essentially cancelled each other out.
While dry and fresh banana exports dropped 44%, roasted decaffeinated coffee saw the largest climb in the improving coffee sector by jumping 55%.
Trend to continue in 2015?
The government estimates that exports will rebound and increase 9% in 2015.
The Finance Minister was quoted as saying that the improving US dollar and depreciating peso have “enabled Colombia to gain competitiveness” to Colombian publication Portafolio.
The former Finance Minister has stated that the economic performance of the United States, a weakening Europe and Japan and doubts about the economic behavior of China all point to a continually strengthening US dollar in 2015.
With the US dollar largely predicted to continue its current rise and the US market composing over 25% of Colombia’s exports, the government sees this an opportunity to bolster exports to the US and other key economic partners.
Others are not convinced however, claiming that such a prediction ignores a weakening oil market’s impact on total export revenue.
Many indicators actually point in the opposite direction of the government’s prediction, stressed the manager of economic research at Bancolombia to Portafolio.
Their analysis suggested that total exports would in fact drop 11%, almost entirely as a result of the current oil situation.
Improvement in other export sectors should be exhibited next year as a result of increased currency competitiveness, he did state however. Some of these include increased exports in coffee and other ‘non-traditional exports’ at rates between 7-13%.
Sources
- Exportaciones crecerian luego de un ano regular (Portafolio)
- Las exportaciones disminuyeron 22,6% en noviembre de 2014 (Portafolio)