The Costa Rican company Desacarga will be the authorized company to provide, from September, a maritime cargo service between the Salvadoran port of La Unión and Caldera, in Costa Rica.
Monica Segnini, CEO of Desacarga, told Elmundo.sv that "... the company is 'finalizing the final details to start operating the ferry in September', which, she explained, will offer a cargo and passenger transportation service both on the Pacific coast, and on land borders."
It has been estimated that since the crisis began in Nicaragua, losses in trade between Nicaraguan and Salvadoran companies amount to $12 million.
The cheese and milk trade is the area that has been most affected by the socio-political crisis occurring in Nicaragua.According to representatives from the Ministry of Economy of El Salvador, losses in bilateral trade not only of cheese and milk, but also of other goods, amount to $12 million.
In the first quarter of the year, trade in milk and dairy products among Central American countries totaled $77 million, and 73% was purchased by companies in El Salvador and Guatemala.
Figures from the Information System on the Milk and Milk Products Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
Due to the crisis affecting Nicaragua and paralysis of construction in Panama between April and May, the IMF has reduced the expectation of economic growth for the Central American region from 4% to 3.3%.
The International Monetary Fund (IMF) cut growth forecasts for the Central American economy, due to the uncertainty caused by the situation in Nicaragua and its effect on the region's economic activity, and the impact of the construction strike in Panama, which has halted works on 260 projects nationwide for the last 30 days.
The Legislative Assembly of El Salvador has approved incorporation into the Customs Union between Guatemala and Honduras.
Although an improvement has been reported in the transit of goods through customs posts as well as an increase in bilateral trade, there are still a lot of aspects that need improving, according to businessmen who trade among these countries.See "Customs Union: Good results, but improvement still needed"
In order to minimize some of the impact that the Nicaraguan crisis has had on intraregional trade, the governments of Costa Rica and El Salvador have announced that they are now in a position to start ferry operations.
After unsuccessfully trying to implement this maritime cargo transport option, in May of last year the Spanish shipping company Odiel decided to end the negotiation process to operate the ferry, due to a disagreement over the setting of tariffs that would have to be charged for the service. Since then, the project has been forgotten.
Reduced times to move goods through customs posts and an increase in bilateral trade are some of the results of the first year of the Customs Union between Guatemala and Honduras.
Twelve months after the entry into force of the treaty between the two countries, trade figures have favored the two Central American countries. In 2017, exports from Honduras to Guatemala totaled $384 million, 16% more than in 2016, and sales made from Guatemala to Honduras amounted to $967 million, which is equivalent to a 6% increase.
In 2017, trade in paint and varnish among countries in the region amounted to $142 million, 7% more than in 2016, and the highest value in the last six years.
Figures from the information system on the Market for Paint and Varnish in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
To be able to ship cargo throughout the region, Central American business leaders are exploring options for moving goods using alternative methods, such as shipping.
Representatives from the Costa Rican government and the union of exporters met to address the issue of blockades in Nicaragua and the logistical drawbacks that they have caused, since Costa Rica transports by land about five thousand containers to the other Central American countries every month. As a result of this meeting, both parties concluded that the most viable option is to use maritime transport.
With the paralyzation of the cargo transport and the retention of about 6 thousand units in Nicaragua, the region is starting to feel the effects of a crisis with no potential solution in the short term.
The crisis in Nicaragua has created high costs in all countries in the region, as according to the latest report it is estimated that at least some 6,000 heavy cargo vehicles are trapped due to the violence and blockades that have intensified in the last weeks.
Since the beginning of the week at least 500 cargo trucks from Central American countries have been unable to get around a blockade in the department of Carazo.
Since the afternoon of last Monday, traffic has reportedly been totally shutdown in the area known as Dolores, near the municipality of Jinotepe, because protesters opposed to the Ortega administration are blocking roads.
In 2017, trade in milk and dairy products among countries in the region amounted to $306 million, 2% more than what was sold in 2016, and the highest value in the last six years.
Figures from the Information System on the Milk and Milk Products Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
Entrepreneurs from Costa Rica are paying attention to what is happening in its neighboring country, where 90% of Costa Rican exports to Central America are transported by land.
In a statement, the union of exporters noted that "... As representatives of the export sector, we are concerned about the transit of goods to the rest of the Central American region, which receives more than $2.3 billion in Costa Rican products.This considering that more than 90% of exports to Central America are made by land and that Nicaragua, as well as being a destination for our exports, is also our gateway to Guatemala, Honduras and El Salvador".
In the fourth round of negotiations to incorporate El Salvador into the customs union process with Guatemala and Honduras, issues such as internal taxes, phytosanitary measures and tariffs, among others, will be discussed.
From a statement issued by the Ministry of Economy of El Salvador:
The IV Round of negotiations for the incorporation of El Salvador into the process of Deep Integration towards the Free Transit of People and Goods between the Republics of Honduras and Guatemala, began today in San Salvador.
The Salvadoran government has stated that there are no instructions to establish import tariffs on Salvadoran products in any Honduran government institution.
From a statement issued by the Ministry of Economy of El Salvador:
April 6, 2018.The Ministry of Economy, in light of news circulating in various media outlets that the Honduran government will take reciprocal measures against Salvadoran dairy products, wishes to make public knowledge that: