Although more than 140 agricultural products have access to the U.S. market, only 70 are currently shipped by local producers, which is partly explained by low production capacity and lack of quality.
According to studies conducted by Central American Business Intelligence (Cabi), Nebraska, District of Columbia, Maryland, Hawaii, Tennessee, Illinois, Mississippi, Maine, Kansas and North Dakota are the states with the greatest potential to take advantage of market opportunities.
After the industrial activity registered in May one of the lowest levels of the last years, it is expected that the sector will close 2020 in negative variations, but more moderate than those reported in the first half of the year.
The Index of Economic Activity of the Chamber of Industry of Guatemala, which is calculated by Central American Business Intelligence (Cabi), states that during May and in the context of the economic crisis resulting from the outbreak of covid-19, fell by about 10% when compared to the same period in 2019.
From January to June in Guatemala, the Industrial Activity Index registered a 2% drop regarding the same period of 2018, which is explained by the drop of the chemical and pharmaceutical industries, and mining.
According to the Industrial Activity Index (IAIG) developed by Central American Business Intelligence (CABI), 85% of the negative result of the index is related to macroeconomic aspects, that is, influenced by what happens with the country's economy, and the remaining 15% is determined by industry issues.
Because the area of stolen land in Guatemala has grown from about 10,000 hectares in the 1990s to 164,000 in 2018, losses in agricultural production caused by this phenomenon reached nearly $650 million last year.
The Chamber of Agriculture (Camagro) estimates that only in 2018, invasions of private property, mainly agricultural production farms, generated a negative impact equivalent to 0.6% of Gross Domestic Product.
The economic slowdown in the U.S., the main trading partner, partially explains the 6% year-on-year drop in the Industrial Activity Index reported during the first quarter of the year.
According to the Industrial Activity Index (IAIG) compiled by Central American Business Intelligence (CABI), the productivity of the 14 industrial sectors have been affected by the increase in the price of gasoline, the new fall in commodity prices, the stagnation of national investment and smuggling.
Lack of legal certainty, lack of investment and excessive bureaucracy are some of the factors influencing industrial activity in Guatemala not to advance in 2018.
The Guatemalan union of the sector reported that the Industrial Activity Index (IAIG) registered a 2% decrease between December 2017 and November 2018, going from 145.67 to 142.70.
In the first semester of 2018, industrial activity in Guatemala decreased by 5% compared to the same period in 2017, explained by a decrease in mining activities, affected by the shutdown of operations at Minera San Rafael.
The index of industrial activity prepared by Central America Business Information (Cabi), shows that the mining sector registered a decrease of 41% compared to the first half of last year, reflecting the effect generated by the suspension of Minera San Rafael.See "Mining Company Still Not Operating"
Between December 2016 and the same month in 2017, the Industrial Activity Index registered a contraction of close to 1%, explained in part by the performance of the food and mining sectors.
The Industrial Activity Index prepared by Central American Business Intelligence (CABI), uses historical information from the year 2012 and takes into account 14 industrial sectors.
According to a recent study, companies that carry out mining activities in the country, operate with a profit margin of 22% before paying taxes.
The report prepared by Central American Business Intelligence (CABI), details that companies in the mining industry operating in Guatemala can achieve extraction costs of up to 55%.
For the third consecutive year, in 2017, foreign investment received by Guatemala fell compared to 2016, explained by a lack of legal certainty, particularly in the mining industry.
Even though no one expected great results at the end of 2017, the 3% fall with respect to foreign investment received in 2016 has worried the business sector, as it reinforces the downward trend seen since 2015, when the FDI received by the country was 12% lower than the amount reported the previous year.
So far this year the Banco de Guatemala has intervened in the foreign exchange market buying $282 million, less than the $320 million bought in the same period in 2017.
As announced by the Central Bank authorities at the beginning of the year, the institution continues to implement actions to reduce the downward trend registered in the price of the local currency with respect to the Dollar.In January 2010 the Quetzal was quoted at Q8.40 for each dollar, and in January2018 this figure reached Q7.34.
The value of the investments that the country has lost in the last five years, has been estimated at $1 billion, due to factors such as high production costs and poor infrastructure, which is having a deteriorating effect on competitiveness.
A study prepared by the CABI at the request of the union of exporting companies concludes that both Guatemalan and foreign companies have opted for neighboring markets such as Nicaragua, Honduras and Mexico in which to make their investments, instead of Guatemala. Production costs, the minimum wage, higher than in other countries of the region, and the deteriorated road infrastructure are some of the factors that have impacted the loss of the country's competitiveness with respect to similar markets in the region.
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