Colombian exports fell by 10.1% in August, primarily driven by a significant decline in the sale of refined oil, which dropped by 25.6% in the eighth month of the year. With these figures, the country’s exports for the first eight months of 2023 totaled $32,669.2 million, representing a 15.6% decrease compared to the same period last year.
The decline in exports is not a recent trend, as it began in December 2022. However, it confirms increasingly negative economic indicators for the national economy. Faced with inflation decreasing at a significantly slower rate than expected, interest rates remaining at 13.25%, and minimal economic growth, Colombia’s economic outlook is challenging.
The prevailing context continues to exert significant pressure on the national economy, which is expected to finish the year with either minimal or negative growth. Experts anticipate that this period of stagnation will persist for an extended duration, with no significant changes expected until mid-2024.
Oil and Oil Derivatives Drive the Decline
According to DANE, the official statistical data agency in Colombia, the decline in exports was mainly due to reduced foreign sales of oil, petroleum products, and related products, which contributed a negative 15.8 percentage points to the overall variation in August.
Nonetheless, in August of this year, 14.4 million barrels of crude oil were exported, representing a 5.2% increase compared to August 2022.
Other Categories Also Declined
Several other categories experienced clear declines. Agricultural products, food, and beverages saw a decrease of 14.8% compared to 2022, primarily due to reduced sales of unroasted coffee, according to DANE.
“Exports of manufactured goods reached $6,755 million and decreased by 4.3% compared to January-August 2022,” states the study. This decline is mainly attributed to the decrease in exports of chemicals and derivatives, which declined by 13.6% and contributed 5.4 negative percentage points to the overall decline in manufacturing.
The United States remains the primary destination for Colombian exports by a significant margin, purchasing 30.2% of the total exports. China is the second-largest trading partner, accounting for 6.6%, followed by Panama at 5.8%, India at 5.6%, Brazil at 4.11%, Ecuador at 4.1%, and Spain at 3.3%.
Exports to Russia and Ukraine Plummet
While neither Russia nor Ukraine are primary partners for Colombian exports, a significant decline in activity in these two markets is evident, primarily due to the war in Ukraine since February 2022.
Exports to Russia fell by 59.9% compared to the same period last year (January-August). This decrease is explained by a 67.2% drop in the sale of frozen beef and a 90.3% decrease in the sale of edible offal.
In Ukraine’s case, the decline is even more substantial, with a 96.3% decrease, primarily due to the near disappearance of exports of cut flowers and foliage.
Changes in Measurement and the Future
The agency responsible for these reports has introduced changes in measurement formulas, mainly to avoid duplication. In this regard, export records from free trade zones were removed, and these data were included in exports to the rest of the world.
Diversifying the export base and adapting to changes in measurement are crucial for driving recovery, according to most experts, with expectations for improvements in the second half of 2024.