Raw materials pushed imports from Ecuador that have already exceeded pre-pandemic levels

Raw materials, fuels and lubricants were the import segments that grew the most in 2021. In fact, this allowed the country’s global figure in purchases abroad exceed the values ​​reached in 2019, a pre-pandemic year.

The growth was achieved, even with the logistical problems -due to the shortage of containers- that still persist on a global scale due to the effects of the health crisis caused by COVID-19.

Until the penultimate month of last year, according to data from the Central Bank of Ecuador (BCE), $21,518 million were purchased abroad, equivalent to a growth of 41.3% compared to the period of January and November 2020 and compared to 2019, when $19,884 million was reached, the increase was 8.2%.

This increase is mainly explained by a greater purchase of inputs such as petroleum oils Y raw Materials. In the latter, which grew by 50%, the acquisition of metal manufactures, polymers, paper or cardboard, soybean oil residues, among other products, stand out.

The Government repeals the ISD for the importation of fuel derivatives, according to Decree 327

For example, only in metal manufacturing the increase was in three digits, 103%. In eleven months, $725 million were acquired from this item.

Miguel Angel Gonzalez, president of the Chamber of Commerce of Guayaquil (CCG), points out that the recovery that is being observed is not only because 2020 was a critical year, but because the economy is growing. “The import of raw materials grew in two digits until November, reaching the highest figure in the last decade,” he says.

However, a point that should also be considered is that, although this item grew, the cost of some raw materials increased. This meant that in some sectors less was imported, but at a higher price.

In the banana sector, for example, inputs became more expensive. Franklin Torres, president of the National Federation of Banana Producers of Ecuador (Fenabe), He said that there was an upward price variation in fertilizers, protectors, foliars, agricultural oil and even urea. This has caused the production price of the box for banana growers to increase by at least $0.60 for inputs.

Miguel Rossignoli, general manager of Ecovitali, explained that the high cost of agrochemicals “has forced companies to start looking for and diversifying their portfolio of sources that are more competitive.” That is to say, get the same products, but a little cheaper so as not to stop buying.

The businessman estimates that as the market is currently, the increase in costs will continue for at least two more years.

Luis Naranjo, technical manager of the Quito Chamber of Commerce (CCQ), He explained that, in addition to the increase in the cost of certain raw materials, the costs of shipping freight should be considered, which, depending on the route, became more expensive by 20% and 30%.

The cost of bringing imports from China rose 187% this year compared to 2020, but is there a price increase for the final consumer?

For Naranjo, the path of growth in imports will be maintained until the first quarter of 2022. “In the first quarter, the increase of 20% on average can be maintained, but after that period it can be located in increases of between 8% and 10%,” he pointed out.

Non-durable goods and trade

According to the GCC, the import of non-durable goods, which are mainly tied to the commercial sector, increased by 13.13% compared to 2020 and 5.71% compared to 2019. “This increase is positive and translates as a sign of economic recovery. However, there is still no full recovery in the sector,” says the union.

In fact, This is reflected in the sales figures of the private sector, which as of November totaled $156,291 million, equivalent to a growth of 20.2% ($26,297 million) compared to the same period in 2020., according to a report from the Chamber of Industries and Production (CIP). The commerce sector reports an increase of 21.7% ($ 9,254 million).

González considers, however, that this good performance of the goods segment it could be diluted at the beginning of this 2022 due to new restrictions due to the appearance of the new variants of COVID-19 and a lower demand from consumers due to the fear of going out and acquiring the virus.

Countries from which goods were imported

According to ECB import data as of November 2021, there were five markets from which more products were purchased.

In the first three places are the United States with $4,711 million; then China with $3,989 million and the European Union nations that encompassed $2,205 million.

These three markets are followed by Panama with an import figure of $1,883 million, and Colombia with $1,674 million. Countries such as South Korea, Peru and Argentina were also important purchase destinations until November 2021. (I)