Bogotá — Colombia’s exports fell 2.8% annually in January 2023 to below $4 billion, and while exports to the US are declining, the country’s outward trade to China is growing.
According to January export data for the last five years from the country’s statistics agency DANE, exports to the US continue to dominate but are their share of the total is declining. In January 2018, Colombian exports to the US accounted for 29.6% of the total, while in January 2023 they represented 22.9%.
Exports to China accounted for 5.8% in the first month of 2018, and 7.2% of total exports in January 2023.
Why are Colombian exports to China growing?
Javier Diaz, president of the Colombia’s foreign trade association (Analdex), told Bloomberg Línea that he believes that “inflation and the increase in interest rates have hit demand in the US, while China is recovering after the contraction caused by the zero-Covid policy”.
He also mentioned that Colombia sold less oil globally, “and this clearly shows the slowdown of the international economy”.
The decline in Colombia’s exports in January was mainly explained by a slowdown in the hydrocarbons sector, specifically petroleum products, according to DANE. “In January 2023, Colombia exported 11.37 million barrels of crude oil , a drop of 17.4% compared to January 2022″, highlighted the statistical entity,” it stated.
According to Diego Gómez, an exchange market analyst at Corficolombiana, “China has begun to gain participation in the exports of the countries of the region. It is a phenomenon that is being seen more strongly in countries such as Chile and Peru, because they are copper producers”.
Gómez added that in Colombia this phenomenon is a little less strong “because we mainly export oil to China”, and within the framework of the energy transition, minerals such as copper, of which Chile and Peru are the world’s largest producers, will be more in demand by the Asian giant.
“China’s strength as a trade partner for Latin America is an important trend, but more so in some countries than others as their exports diversify.”Diego Gómez, an exchange market analyst at Corficolombiana
Gómez added that exports to China will grow over the coming months as the Asian country’s economy recovers and its demand for raw materials, including oil, grows.