Export Crisis Impacts Key Global Players

The 2008 global recession continues to have repercussions for South Florida exporters. Decreased demand for imports in Latin America and Europe have meant lost sales. The global export crisis has affected everyone, in particular key players:

China Shows Declining Growth

Even China, the world’s second largest economy, has been hard hid by decreased demand for its exports. China is generally regarded as the trigger for global industrial growth. Its meltdown has impacted global commodity markets, including copper, iron, and oil. Commodity prices in general have plunged worldwide. Low oil prices have significantly impacted oil exporting countries in the Middle East and Latin America.

Russia’s Energy Sector Is Listless

Russia’s economy is built on the export of raw energy materials. Heavily dependent on exports, Russia is now trying to boost its military to compensate.

Saudia Arabia Is Strapped For Cash

Declining oil prices have placed the Saudi regime in a precarious position. As an oil export dependent economy, the Saudis are now looking for ways to fill in the gaps. The Saudi deputy crown prince has even suggested selling a portion of Saudi Aramco.

African Nations Suffer From Loss of Demand

Zambia produces industrial metals, mostly consumed by China. Angola’s economy is dependent on oil sales to China. Nigeria also depends on oil exports. South Africa exports metals and fuels to China and the U.S. Decreased demand for exports has contributed to political and economic instability.

Latin American Exports Fall To Record Lows

Latin America’s commodity boom in the 200os was driven largely by China. Since 2013, Chinese demand for commodities has slowed dramatically. Prices for crude oil, coal, copper, iron ore, and other metals have fallen and slowed economies. At the same time, inflation and unemployment have been on the rise. Most Latin American countries also have high debt levels, although not as high as during the 1980s debt crisis. Brazil and Venezuela have the gloomiest prospects, Ecuador and Argentina are also projected to have declining growth due to a combination of low export prices, political instability, and weak economic conditions.

Moderate and High Growth Export Opportunities

When commodity prices and exports decline, countries lack the economic stamina to thrive. Imports tend to fall as a result, leaving exporters without  buyers for their goods. Low commodity prices have hurt all our trading partners, including Mexico and Colombia (oil) and Chile and Peru (minerals). Some countries are doing a bit better than others, and some, mainly in Central America and the Caribbean, are growth import markets.

Mexico Benefits From An Integrated Industrial Economy

Mexico has a sizable manufacturing industry and its economy is closely tied to that of the U.S. As a result, Mexico has held strong throughout the economic downturn. The biggest problems are strained public finances and political unrest.

Chile, Colombia and Peru Deal With Political Challenges

Although hurt by low commodity prices, Chile, Colombia, and Peru are showing a moderate (2-3%) growth rate for 2016. Chile and Colombia are both dealing with public blowback from proposed reforms, while Peru has seen anti-mining protests. These political challenges are not expected to result in significant instability, leaving a window of opportunity for Miami exporters.

Bolivia and Paraguay Are High Growth Economies

These two counties are projected to grow at more than 3.4% in 2016. Bolivia has expanded its natural gas exports to neighboring Brazil and Argentina. Paraguay has created a business-friendly climate that, along with low wages, has attracted many Brazilian companies. Strong performers tend to be smaller economies that rely on non-oil commodities and are subject to changes in external demand, so the high growth countries of today may show significant declines tomorrow.

The Caribbean Is An Established Trade Partner

With the exception of Cuba, Caribbean regions are already highly integrated with the U.S. economy. Agricultural commodities such as coffee and sugar  are in high demand in the U.S. These countries also benefit from low import prices, particularly in the energy sector.