By Esneyder Negrete |
América Writing (EFE).- One year after the start of the Russian invasion of Ukraine, the Latin American economies have felt their greatest impact in the raw materials sector, with an increase in agricultural, gas and oil exports , but also with the cost of traditionally affordable food.
The region’s dependence on fertilizers and agricultural inputs, mostly imported from Russia and Ukraine, has increased the production costs of various foods, making the cost of living more expensive, Colombian economist and financial consultant John Escobar told EFE. .
Shortage of inputs and inflation in Latin America
Due to the conflict between two of the world’s largest producers of fertilizers, the average price per ton of these products went from costing $350 in 2021 to $600 in 2022.
The increase in costs, due to scarcity, impacted the Brazilian agricultural sector, whose gross domestic product (GDP) fell by 4.1% in 2022 after having grown by 8.3% in 2021, according to projections by the Confederation National of Agriculture.
The highest cost was that of fertilizers, of which Brazil, with a low production, is the fourth largest consumer in the world.
In Argentina, a country that imports close to 70% of the fertilizers it consumes, imports fell by 31%, to 3.1 million tons, but high prices raised the economic outlay.
Also in Colombia, fertilizers, whose high prices are partly attributed to the rise in inflation, which closed 2022 at 13.12% (the highest figure since 1999), have been imported mainly from Russia (62 million dollars in 2021), although also from Ukraine to a lesser extent.
The war “disrupted the international market for inputs that are necessary for the animals and soils that feed us all,” stressed the president of the Colombian Farmers’ Society (SAC), Jorge Enrique Bedoya.
According to the Food and Agriculture Organization of the United Nations (FAO), world prices for wheat and corn reached all-time highs in 2022, as did vegetable oils, while dairy products and meat rose to unprecedented levels. Since 1990.
As in other regions, higher food prices pushed up inflation in most Latin American countries.
Also opportunities that “some have known how to capitalize on”
Despite the economic impacts derived from the war, “several opportunities have also arisen that some have been able to capitalize on, and others have not” in agriculture, explains economist John Escobar.
Among those that do include Brazil, whose economy, the largest in Latin America, ended 2022 with records in its exports (335,007 million dollars) and in its trade surplus (61,800 million dollars).
The increase in food prices in world markets caused Brazilian agricultural exports to grow by 36.1% last year, to 75.05 billion dollars.
“Despite all the negative effects of a war like that, Brazil was one of the main beneficiaries of the new flows of global assets,” economist Silvia Matos, a researcher at the Getulio Vargas Foundation (FGV) told EFE.
In Argentina, the main agricultural complexes -responsible for 63% of total exports- increased revenues by 8.5%, up to 46,461 million dollars, due to the rise in prices in international markets, although the quantities exported fell by 5.5%.
But unlike Brazil, in Argentina the positive impact on sales “was far exceeded” by the need for a greater disbursement to pay for energy, fertilizers and freight, among other goods, according to a report from the Rosario Stock Exchange, which which was reflected in the halving of the trade surplus in 2022.
Opportunities in Latin America in energy matters
In addition to the opportunities in the agricultural sector, some countries in the region have also taken advantage of the situation to increase their gas, coal and oil exports, such as Peru, whose sales of liquefied natural gas and oil rose on average by 57.9%. in 2022.
“Liquefied natural gas has had a variation of 85.9% growth,” said the head of ADEX Consulting in Peru, Lizabeth Pumasunco, who pointed out that the main recipient was the United Kingdom, with purchases worth 1,411 million dollars ( 89.86% more), followed by South Korea (136.10% more) and Japan (53.30% more).
Exports from the oil sector also increased by 36.15%, with increases, in crude oil, of 75.7%.
Brazil and Colombia increased oil exports
Regarding the main buyers of this derivative, Brazil, which imported a value of 259.1 million dollars (453.72% more), and the United States, which bought for 249.9 million (20.59% more). ), concentrated all the shipments.
Brazil and Colombia also increased oil exports, the price of which skyrocketed in 2022 as a result of the conflict.
According to Matos, in 2022 Brazil had record tax revenues from exports of oil and derivatives, which accounted for 2.6% of GDP.
As for Colombia, the state oil company Ecopetrol shot up its net profit in the first nine months of 2022 by 150.1%.
Against them, Argentina, a net importer of energy, raised energy imports by 4% in volume, although due to the rise in prices it had to double spending compared to the previous year, with which the increase in its energy exports by a 44% was not enough to balance the energy balance, which deepened its deficit.
