Central America: Exports Increase, Income Goes Down

The region is expected to conclude 2018 with a rise of just over 4% in the volume exported and just 3.6% in value, due to the fall in international prices of several agricultural products.

Monday, November 5, 2018

According to the International Trade Outlook for Latin America and the Caribbean 2018, published by the Economic Commission for Latin America and the Caribbean (ECLAC), it is expected that this year Central America will export larger volumes at lower prices.

The report details that in Central America, the expansion of exports would be fully explained by the larger volume exported, since the sub region would experience a decline in the prices of its exported basket.

The document explains that this is due to the marked declines in the prices of cane sugar (-25%), coffee (-14%) and palm oil (-9%). This has particularly affected shipments from Honduras, Nicaragua and Guatemala, where these products represent large proportions of the total value exported (30%, 16% and 15%, respectively).

The Institutional Relations Director of the Guatemalan Exporters Association, Fanny D. Estrada, said to Elperiodico.com.gt that "... ECLAC's estimations are probable because last August the reduction in shipments was 2.4 percent. She emphasized that it is because of the impact of international prices on conventional products, although there are sectors such as clothing and textiles, fresh fruits and vegetables that have been more dynamic."

The report adds that in 2018, the maquila activity and free trade zones will mitigate the negative shock of the decline in prices of the agro-export sector. Between January and June 2018, exports from the maquila sector and free zones in Central America and the Dominican Republic increased by 5% in value compared with the same period in 2017 (a higher rate than the average of total exports of this group of countries).

See full report.

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