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Colombian Exports Could Reach $40 Billion In 2010
First Published Monday, 12 July 2010 11:29 pm - © 2010 Dow Jones
(Updates with comments from Trade Minister; adds details and background)
By Darcy Crowe
Of DOW JONES NEWSWIRES
BOGOTA -(Dow Jones)- Colombian exports are on pace to reach a record-breaking $40 billion this year as companies offset a decline in exports to neighboring Venezuela by finding new
markets in Central America and the Caribbean, Trade Minister Guillermo Plata said Monday.
The government expects exports to climb 22% in 2010 and break the $37.2 billion mark from 2008, despite a diplomatic dispute with Venezuela that has led to a 70% plunge in sales to that
country, Plata said.
"Colombia is diversifying its exports, and in the last three months, firms have started to offset the losses to Venezuela," he said. Venezuela has traditionally been Colombia's second-largest
trading partner, surpassed only by the U.S.
Venezuelan President Hugo Chavez essentially shut the border to Colombian products last year in a heated diplomatic spat with Bogota. President-elect Juan Manuel Santos has said that
fixing diplomatic and trade relations with Venezuela will be one of his priorities. Chavez is slated to attend Santos' inauguration on Aug. 7.
Plata said that even if the new administration is able to reopen the Venezuelan border to Colombian goods, the main goal should be diversifying exports. "Putting all our eggs in one basket
is very risky," he said.
Exports to Venezuela could also suffer even if relations are restored due an economic recession and strict currency controls.
As a result of the problems with Venezuela, China is now Colombia's second-largest trading partner. Plata, however, highlighted that the products Colombia used to sell to Venezuela, such
as manufactured and agricultural goods, are being redirected to markets in Central America and the Caribbean.
This year's export boom, however, has been driven by sales of commodities like oil, coal, coffee and ferronickel. Manufactured and agricultural goods, among others, are down 4.5%, a
figure that Plata says is the result of the problems with Venezuela, which was a key market for these types of items.
"It's actually a very good number if you consider that sales to Venezuela are down 70% and shows that other markets are compensating for the decline," he said.
Foreign direct investment, meanwhile, could reach $10 billion this year, as money continues to pour into Colombia's booming oil and mining industries, Plata said. Foreign direct
investment in the country so far this year was $4.4 billion, 8.5% higher than in the same period in 2009.
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