Colombia, leader in the US market, knows the star products
Published on 23 February 2018
The United States is a destination where Colombian exporters can find good opportunities. Next, we analyze the performance of its most outstanding products in this square.
Four products from the Colombian export portfolio stood out in the shipments of the last months to the United States. Three are commodities, which in two cases have been favored by prices, and the other is a luxury product that advances strongly in the international market due to the distinction of origin. These are oil, gold, coffee and flowers, as the following table shows.
There is no greater science behind the expansion of black gold exports. The price per barrel of Brent increased 17.8% between December 1, 2016 and November 30, 2017. The increase could be even greater, but the fact that production has decreased by 3.5% throughout 2017, as As a result of operational difficulties and attacks by the National Liberation Army, it stopped the advance.
By 2018, stable production is expected, with an average of between 860,000 and 880,000 barrels per day. Regarding the price, it is expected to continue the rise and end 2018 even above the US $ 80.
Another product that benefited from the rise in the international price was gold. In the period under analysis, the price rose 9.4%, reaching US $ 1,276.7 per ounce. Additionally, the production of the companies belonging to the Colombian Mining Association (ACM) grew 12.2% to 285,000 oz, and is expected to increase to 350,000 oz at the end of the year.
In the midst of political and financial uncertainty, it is uncertain whether gold will rise significantly this year, although the most pessimistic forecasts do not fall below US $ 1,100 per oz (at the other extreme, it is believed that it could spend US $ 1,500 per oz)
The case of coffee responds to the increase in terms of volume and higher values paid by some buyers, as opposed to what happened in the market in general. The price in New York fell 10.9% in the period of analysis, and closed November at US $ 1.26 per lb. In terms of volume, according to the National Federation of Coffee Growers, the production of the whole country fell 3%, while the value of exports rose 5% to reach 12.5 million bags of 60 kg.
However, as already mentioned, some exporters paid more or increased their volumes, and even did both.
As for flowers, of which Colombia is the second largest exporter in the world, after the Netherlands, there is an impact of both value and volume. According to the Colombian Association of Flower Exporters (Asocoflores), shipments registered an increase of 8% in terms of value and 3.5% in volume in the first semester of 2017.
The two most outstanding products are the carnation, of which Colombia is the main world producer, and the hydrangea. In the first semester of 2017, shipments of the first of these two to the United States registered an increase of 7.4% in terms of value and 3.3% in volume, compared to the same period of the previous year.
In contrast, among the products that stood out for the reduction in the value generated by their exports, are hard coal, Cavendish type bananas, doors, windows and aluminum marquetry, and emeralds. The values can be seen in the following table.
In the case of coal, the reduction in revenues was due to a decrease in prices, which went from an average per ton of US $ 66 to one of US $ 60. The Cavendish banana was also impacted by lower delivery prices, having experienced a slight decrease from US $ 512 per ton to US $ 509 per ton, but above all, due to a lower volume, down from 319,000 tons to 281,000 tons.
The value of exports of doors, windows and aluminum marquetry reduced, however, was reduced exclusively by a smaller movement of merchandise. The price rose from an average of US $ 10.6 per kilo, to US $ 12 per kilo, but the movement was reduced from 16.4 tons to 13.4 tons. The same happened with the emeralds, which had a rise in the average price paid per carat from US $ 1,961 to US $ 2,491, but their movement was reduced from 576,268 carats to 97,561 carats.
In general, the dynamics of Colombian exports will depend on the prices of commodities and volumes, always exposed to biological, geological or climatological factors. However, it is important to note the value that the US importers give to the products of the South American country. The focus should be on maintaining quality and getting the best buyers. Finally, the government will have a very important role in ensuring social stability that guarantees the stability of the environment in which extractive and agroindustrial activities are carried out.