Status Of Trade Between Americas

04 Nov Status Of Trade Between Americas

The easing of restrictions on Panama Canal transits (as mentioned in last month’s newsletter) has brought some relief to exporters in South America, however other factors are contributing to a widening gap between imports and exports.

Whilst the end of October will see improved connectivity for South American exporters across Chile, Peru and Ecuador due to Seaboard Marine expanding its West Coast South America service, elsewhere weather conditions are creating challenging conditions for producers.

Warmer temperatures earlier in the season and anticipated rain have caused the Peruvian blueberry growers association to scale back its export forecast by 4.2% despite a 15% increase in the cultivated area this year, falling 4.4% short of last year’s total.

In addition, grape producers in northern Peru are also anticipating reduced production, as well as smaller fruit, with the warmer conditions also impacting mandarins. Elsewhere, Chilean producers are concerned about the US 12.5% tariffs which could potentially eliminate a season’s profit.

In Argentina, growers of oranges and mandarins have seen consumption reduce 10% from last year, exports drop 34% and prices rise 17% (below the rate of inflation), all attributable to the trifecta of rising costs, falling domestic consumption and loss of competitiveness in international markets.

These statistics suggest South America’s trade imbalance with the US will expand further, which is reflected in the fact that maritime imports grew 8% in the first half of the year, outpacing export growth of 3.5%. Moreover, southbound volumes have increased every month this year, whereas northbound traffic contracted every month except June.

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