Latin America and the Caribbean region is a promising destination for Colombian exports

According to DANE, the main destinations for Colombian exports in 2022 were the United States and the European Union, with a share of 26% and 14%, respectively. Because of the weight of these places in foreign trade, the importance of the countries in the region is sometimes forgotten.

With a population of 662 million people in 2022, according to ECLAC, the countries of Latin America and the Caribbean are an attractive market for Colombian exports. In addition, a good part of the Colombian products bought by this region are industrial, so exports to the region boost Colombia’s industrialization.

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Latin America and the Caribbean, an important source of demand for Colombian exports

Between 2013 and 2022, Colombian exports to the region exceeded a cumulative 312 million tons. That means that, during that period, they accounted for 27% of the total Colombian exports, which reached 1,173 million tons, according to calculations based on DANE information.

The percentage share of exports to Latin America and the Caribbean has been improving and since 2018 is 30% of the total Colombian exports. The worst year was 2016, when sales to countries in the region were barely 22% of Colombian exports.

From 2013 to 2022, the main destination of Colombian exports to Latin America and the Caribbean was Panama, which accumulated 18.7% of what was exported to the region. Different from what happened in the 10 years from 2003 to 2012, a period in which 25% of everything exported to Latin America and the Caribbean was sent to Venezuela, as can be calculated from DANE data.

The other important destinations of Colombian exports to this region of the planet in the last ten years were Ecuador, where it went 12.4%, Brazil (10.8%), Mexico (8.7%) and Peru (8.3%).

Colombian exports to its Latin American and Caribbean neighbors are mainly industrial goods

In international trade, it is not only important how much is sold, but also what is sold. Exporting computers has a greater impact on a country’s economy than selling fruit or raw materials. Well, the countries of Latin America and the Caribbean demand mainly industrial products from Colombia.

While exports from Colombia to the rest of the world were concentrated in mining, at 48.4%, Colombian exports to Latin America and the Caribbean were concentrated in manufacturing industry products at 63%, during the years 2013 to 2022 (DANE).

One of the products most in demand in the region are vehicles for transporting people that do not exceed a cylinder capacity of 3,000 cm3. This tariff item exported more than US$2.78 billion to the region between 2013 and 2022.

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Other Colombian products demanded by Latin America and the Caribbean between 2013 and 2022, are polypropylene, of which it purchased US$2.215 billion; polyvinyl chloride (PVC) for US$2.209 billion; medicines for human use, for US$2.118 billion; and chocolates and confectionery, for US$1.295 billion (with information from DANE).

Demand from Latin America and the Caribbean shows growth projections

For Colombian exports, the region is important because of the volume it represents in total exports and because it is mainly manufacturing industry products. The good news is that growth projections are favorable.

The main destinations for Colombian exports in the region, both this year and in previous years, stand out as the countries with the best growth prospects. The IMF estimates that Panama will be the fourth fastest growing country in the region by 2023, with a 4% increase in GDP.

The IMF expects Venezuela to be the fastest growing country in Latin America and the Caribbean in 2023, at 6.5%, as oil prices are expected to remain high due to the Russian-Ukrainian war and Nicolas Maduro’s pro-market measures are expected to take effect. Now that relations between Colombia and Venezuela are improving, the latter is a destination to be taken into account for Colombian exports.

In the medium term, the IMF estimates an average annual growth for Latin America and the Caribbean of 2.6% by 2028. Venezuela and Panama appear above average. Venezuela’s average annual growth in those 5 years would be 3.5% and Panama’s would be 4%.

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