Ecuador missed the opportunity to export $797 million in all of 2021 as a consequence of the increase in prices in maritime freight, according to the Ecuadorian Federation of Exporters (Fedexpor).
The union details that the aquaculture and fisheries sector recorded the largest potential shipment loss at $410 millionfollowed by agri-food and agro-industrial with $210 million and manufacturing with $125 million.
Fedexpor explains that, for sectors that trade to China, the increase in the cost of maritime freight reduces their competitiveness and participation in that market, or in the same way, limits the increase in exports, as in the case of the aquaculture sector.
Despite the global logistics crisis, Ecuador plans to export 15,000 more tons of cocoa in 2022
Jose Antonio Camposano President of the National Chamber of Aquaculture, said that the increase in the cost of freight makes shellfish exports more expensive, as well as key inputs for production. “We have been asking the authorities to apply the drawback as a means to partially offset these negative effects,” said Camposano.
At the end of 2021, the shrimp sector exported $5,323 million, thus concentrating 37% of the country’s non-oil non-mining exports.
For its part, the banana sector explains that its drop in exports was also due to the increase in shipping freight that affected the placement of fruit spot.
In addition, In 2021, the export sector faced an additional cost of transportation fees of $91 million. In other words, the different export segments had to make additional payments (than those of the pre-pandemic) for the import of supplies and machinery that they use for the transformation and processing of their products.
The manufacturing, aquaculture and fishing sectors were the ones that received the greatest blow of the cost overrun with $ 65 million. Sectors that use inputs sourced from Asia assumed a higher transportation cost than industries that source regionally or locally. Until the end of 2021, the cost of transportation increased by up to 117% compared to 2019, for Ecuadorian imports.
plastic rubber, for example, it is intensively searching for other countries of origin closer than the Asian continent to determine if it is possible to replace raw materials. “The increase in freight and the same raw material forced us to increase sales prices abroad and in some lines in Ecuador,” he said. Andres Cisneroscommercial manager of the firm, who added that during 2021 they chose to increase the amount of safety inventory.
Despite logistical drawbacks, Ecuador’s rubber, plastics and leather manufacturing sector exported $223 million in 2021 to Colombia, the United States and Peru. The figure was 58% more in value compared to 2020 and an additional 39% in volume.
Fedexpor explains that, before the logistics crisis, the cost of transportation was $5 for an import costing $100. But since the second half of 2020, this amount has risen to $10.96 for an import. from $100 to December 2021.
Additionally, due to logistics, the union points out, a bottleneck is created in ports due to lack of workers and compliance with biosafety protocols in ports due to the pandemic.
Given the logistics problem that affects the entire supply chain on a global scale, Fedexpor has established the emergency logistics front. This front allows the establishment of safe, efficient and competitive logistics, to mitigate the negative impact on the export sector, which other competitors do not face due to their greater geographical proximity to their destination markets (Central America-United States; Asian countries-China), as well as also better tax conditions. (I)
Source: Eluniverso
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