Latin America feels the global crisis

Fertilizers for the powerful Brazilian agricultural industry, semiconductor chips for Mexican automakers or lack of ships to export Colombian coffee: Latin America It is also beginning to feel the effects of the global supply crisis.

Although the situation is not critical, as in the United States, where the Christmas season is threatened, the supply chain in some Latin American countries begins to stress, since the region is clearly an importer and depends on world trade.

Since restrictions on mobility and economic activity began to be relaxed due to the covid-19 pandemic, demand for goods and services has experienced sudden growth to which manufacturers and transporters have not been able to respond, which has generated bottlenecks in different parts of the world, especially in Asia and the United States.

Here is a summary of the current situation in the large Latin American economies.

 

Several workers place the Christmas tree in the Rockefeller Center plaza in New York. Photo EFE

Brazil

The collapse of Asian ports is impacting Brazil, the great Latin American economy and one of the world’s largest food exporters, as fertilizers for agribusiness They come mostly from China, its main trading partner.

It is also being affected by the embargoes imposed by several countries on Belarus, one of the largest exporters of potassium, the raw material for making fertilizers, Luis Eduardo Rangel, special advisor to the Ministry of Agriculture and Livestock, told Efe.

Although the analyzes “do not indicate an immediate crisis”, the effect could be felt in the 2021-2022 harvest, so Brazil is closing contracts with other suppliers to reduce a possible shortage, Rangel stressed.

According to the Parliamentary Front of Agriculture, the container crisiss already had a negative impact of $ 1 billion on agricultural exports between last May and August.

“The crisis is going to normalize in a maximum year and a half and then there will be more containers,” Roberto Gusmao, president of the Port of Suape (northeast), one of the main in the country, highlighted to Efe.

The Costanera Center in Santiago de Chile. The Costanera Center in Santiago de Chile.

In some cities, some products are also starting to become scarce, like chinese toys, and several car factories have had to slow down their operations due to a lack of parts, such as semiconductors.

Mexico

The shortage of semiconductor chips it is most acute in the powerful Mexican automotive industry, the main component of industrial GDP, and specialists point out that it could largely explain the 0.2% quarterly drop in GDP between July and September.

“We are very vulnerable, since we import many products, not only from China, but also from the United States,” Pablo López Sarabia, a professor at the Tecnológico de Monterrey, told EFE.

Mexico, he added, is also suffering a “double impact“: in recent times he has faced teacher blockades due to salary demands on the railways of the western state of Michoacán, affecting access to the Lázaro Cárdenas port, key to the Pacific.

Apart from the automotive sector, “retail” is also being hit and there is a certain lack of products that were in high demand in the pandemic, like bicycles.

The central bank of Mexico attributes to these factors part of the rise in inflation, which is close to 6% so far this year, double the official goal.

“The studies indicate that supply chains are not going to surely recover until almost the end of 2022, when it begins to normalize,” warned Professor López Sarabia.

Colombia

Colombians might have trouble finding some Christmas gifts csuch as toys, spirits, electronics, and household appliances, but what they are going to feel above all is an increase in prices, according to specialists.

“The shortage helps to increase prices, but the greatest impact is on logistics costs that have risen dramatically,” Javier Díaz, president of the National Association of Exporters of Colombia (Analdex), told Efe.

A container that usually It was brought from China at a cost of 2,200 dollars, today it costs between 20,000 and 22,000: “The costs have multiplied by 10 and that is not going to be assumed by the seller,” he said.

For the expert, the solution in Latin America may take even longer than the rest of the world: “We are barely 4% of the shipping companies’ business, we are not a priority. At least throughout 2022 we are going to have this complicated logistics and high costs. ”

Congestion in ports such as Los Angeles, in the United States, has also affected exports and an operation that took 40 days today is taking 75 days.

For that reason, said Díaz, many operations, mainly coffee and sugar, were transferred to Cartagena, in the Caribbean, “to try to fulfill the commitments “, he specified.

In Chile the pressure is not so much on the availability of products, but on inventories and waiting times, especially in durable goodsGeorge Lever, Manager of Studies of the Santiago Chamber of Commerce (CCS), told Efe.

“There is a very strong increase in the entire supply chain, from productive inputs to the historical increase in the cost of ocean freight “, he alerted.

This has led to a sharp increase in prices, especially in segments that operate with lower margins. such as high-tech, furniture, cars, power tools, stereos and microwaves.

“In the case of Chile, in addition to the reactivation of demand and supply problems due to congestion in production chains, we have the effect of abundant liquidity in households due to the early withdrawals of pension funds and the recent strengthening of fiscal transfers, “he concluded.

By Editor

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