Import accentuates the country’s trade deficit

Ecuadornews:

The increase in exports of non-oil products is not enough to balance the trade balance of the country. Although these grew by 5.3% until November last year, that did not stop the deficit against the country continues to grow and, until that month, closed at $ -514.8 million.

That balance in red is due to the fact that last year a greater purchase of products from abroad continued to generate pressure and caused that, at the time of payment, more dollars must leave the country, compared to the money that was exported. A behavior that especially is reflected in the non-oil balance, which until November closed with a negative balance of $ 4,707 million, after imports ($ 16,382 million) far surpassed exports ($ 11.7675 million).

Felix Casares, president of Betramética, a firm that studies and analyzes statistical figures, mentions that these results respond to the free entry that non-oil imports continue to have (these in 11 months grew by 13.5%). However, the effects that the recovery of the price of crude oil generated at the beginning of the year must also be added to this. This caused the cost of buying petroleum products to grow by 39% and that, in the period studied, the country must pay $ 4,032 million, compared to $ 2,899 million last year, even when the tons of purchases were kept almost at the same levels.

Experts believe that, in the midst of this scenario, it is impossible for non-oil exports (which totaled $ 11,675 million in November this year) to inject greater balance into the balance, even less when last year the sector had to face the fall of some prices and the consequences of the lack of competitiveness, which continues to make the Ecuadorian product less attractive in the international market. It happened with the shrimp sector, which until November last year increased its income by 8.2%, but struggling with a greater shipment of product.

Daniel Legarda, president of the Federation of Ecuadorian Exporters (Fedexpor), admits that imports have once again staggered the balance.

However, it claims that the deficit of $ 514.8 million still remains manageable compared to that of other years (in 2015 it reached $ -2.066 million). Although for Casares, the upward trend is already sufficient reason for the government to question again whether or not to restrict imports.

An option that is already rejected by Legarda, because it is a measure that, in other years, already showed serious effects on trade, including exporting companies that need to import raw materials to complement their production processes.

If the priority is to balance the balance, he said, that correction must come from the side of a greater boost to exports. “And that promotion is generated by improving competitiveness levels. We cannot fall back into the error of correcting imbalances through a new restriction, “he argued.

Non-oil sales

The shrimp leads

Shrimp was the product that generated the most revenue. Until November 2018, sales totaled $ 2,971 million, surpassing $ 81 million for bananas. The supply of canned fish and cocoa rose by 7.7% and 8.6% respectively.

Coffee and flowers, to the downside

The coffee sector continued to deplete its income. These fell by 31.8 million after closing sales for $ 74 million. The turnover of the floriculture sector also decreased from $ 819 million to $ 792 million. The sale of juices was not good either: it fell by 14%. (I)

Source: https://www.expreso.ec/economia/importaciones-deficit-comercio-ecuador-economia-KY2573936