Latin America should take advantage of rising commodity prices to protect against future crises, says UNCTAD
RIO DE JANEIRO, BRAZIL – Latin American countries should take advantage of the current rise in commodity prices to increase their resilience to future external shocks, such as fluctuating commodity prices and volatile capital flows.
This recommendation is made by the United Nations Trade and Development Agency (UNCTAD) in a report to be discussed at the World Commodity Forum in Geneva on Sept. 13-15.
According to the study, 14 of the 33 Latin American countries depend on the sale of commodities, which account for 60 percent or more of their total merchandise exports.
The study highlights two key factors behind the recent rise in commodity prices. First, the recovery in global economic activity, as countries make progress in vaccinating against Covidien and gradually lifting mobility restrictions.
In addition, improved investor and consumer expectations have contributed to the rise in commodity prices, particularly for energy and minerals.
However, the situation varies across the region. On the one hand, Brazilian export revenues for soybeans increased by 24.3% in the first six months compared to the same period in 2020, while exported volumes were significantly lower. Similarly, Chilean copper export revenues increased by 48.8%, while the increase in volume terms was only 4.4%.
On the other hand, however, the negative impact on net commodity importers in the region has increased. This is the case in Costa Rica, where the cereal import bill increased by 34.8% in the first five months of the year, while the volume purchased increased by only 5%.
The report notes that gross domestic product (GDP) trends in the region correlate with commodity price trends. In times of higher commodity prices, governments take advantage of this to spend more money.
However, the UN agency stresses that the high level of uncertainty in commodity markets and Latin America’s heavy dependence on these products highlight the need for the region to improve its ability to adapt and cope with future crises.
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
-0.10%
166,934.20
-0.10%
64,397.45
-0.66%
11,042.67
+0.39%
2,947,349
-1.77%
2,452.46
+0.84%
58,104.31
+0.40%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 166,934.20 | -0.10% | +21.85% | 167,100.95 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
Read More from The Rio Times