South American Trade Round Up
It’s been a busy month for South America, and as international logistics specialists for the region, Envío has summarised a few items of trade news that have been highlighted by the Institute of Export and International Trade.
Argentina – Inflation Leads To Interest Rate Hike
Argentina has recently raised interest rates to a thirty year high of 97% in an attempt to tackle its soaring inflation. According to some reports, the 6% increase has been introduced by the government to avoid a big devaluation in currency before upcoming elections in October. The country is currently low on foreign exchange as its citizens embrace the US dollar, sparking fears this could hinder a joint Brazilian-Argentinian currency, which had been proposed by both countries earlier this year.
Brazil – UK Considering Expanding Poultry Imports
The UK is considering increasing its imports of poultry meat products from Brazil after last year’s review of the control system. In April, the UK confirmed new updated quotas that would increase the volume by 16.6m kgs tonnes, bringing the total to 96.5m kgs per year once it comes into force. Brazil’s vice president, said the UK’s endorsement of their poultry exports will lead to a new digitised procedure that will reduce costs and stimulate the economy.
Chile – Lithium industry shake up
Chile is the world’s second-largest Lithium producer, and the state are set to start talks with private company SQM, as part of their plans to take stronger controls in the metal. The industry faces the potential of nationalisation, which some analysts fear could impact the supply chains and the attractiveness of sourcing the product from Chile. The raw material is a key component for electric vehicle batteries and prices have crashed this year after weak Chinese demand for electric vehicles.
Ecuador – China Trade Deal
China have all but agreed a free trade deal with Ecuador that could be worth $4bn to the Latin American country over the next 10 years. The Ecuador government are expecting non-oil exports to be boosted by up to a third over this period, as the deal applies to 99% of its exports to China. The agreement is not finalised due to current difficulties in domestic politics, but if and when the deal is approved, Ecuador would become part of China’s Belt and Road investment strategy, joining Peru, Costa Rica and Chile in having agreed free trade deals with Beijing.
Peru – Work On New Port Halted
Work on a major new port in Peru stopped recently following a landslide at a connecting tunnel. The incident damaged homes near where the mega-port of Chancay is being built and forced work to stop. The first stage of the port’s development, which is about 50 miles north of Lima, is set to be completed by the end of next year and is viewed as a crucial outpost for international trade along the Pacific basin.