“This world's not going to change unless we're willing to change ourselves.” -  Rigoberta Menchú (Guatemalan human rights activist and Nobel Peace Prize laureate)

MARKETS

February 13, End Of Day

• Argentina
  • S&P MERVAL Index = 2,353,743.68 (YTD = -7.10%)
• Brazil
  • BOVESPA Index = 124,850.18 (YTD = 3.80%)
• Chile
  • S&P IPSA Chile = 3,930.39 (YTD = 8.74%)
• Colombia
  • MSCI COLCAP = 1,535.55 (YTD = 11.31%)
• Mexico
  • IPC Mexico BMV = 54,160.11 (YTD = 9.39%)
• Peru
  • S&P/BVL Peru = 29,412.94 (YTD = 1.56%)

BUSINESS

Trade Trends in Latin America

The recent report by the IDB provides an analysis of trade performance in Latin America for 2024, highlighting key trends, sectoral shifts, and external factors shaping the region’s trade landscape.

1. Overall Trade Performance

• The value of exports grew by 4.1% in 2024, reversing a 1.6% decline in 2023.
• Growth was driven by increased export volumes rather than price gains.
• The Caribbean saw the highest recovery (+18.3%), followed by South America (+4.0%) and Central America (+3.6%).
• Imports increased by 3.2%, after a 6.8% contraction in 2023.

2. Key Trading Partners & Market Trends

• U.S. imports from LAC increased by 6.7%, compared to 3.1% in 2023, maintaining its position as the largest destination for Latin American exports.
• China’s imports from LAC fell by 0.1%, following a 4.7% increase in 2023, signaling slowing demand.
• European Union imports from LAC grew by 1.9%, recovering from a 6.4% contraction in 2023.
• Intraregional trade declined, with LAC’s intraregional trade share falling from 15.1% to 14.7%.

3. Country-Specific Highlights

• Argentina (+18.1%) and Uruguay (+14.6%) saw strong recoveries, fueled by rebounds in agricultural production after severe droughts in 2023.
• Venezuela’s exports (+18.7%) were largely due to increased oil shipments, particularly to Asia.
• Mexico’s exports grew by 4.0%, boosted by higher prices and sustained demand from the U.S.
• Brazil’s exports contracted (-0.8%), due to lower prices for soybeans and maize, despite volume gains in other commodities.

4. Risks & Future Outlook

• Uncertainty remains high, with no clear signs of a sustained trade recovery.
• China’s economic slowdown and Europe’s weak growth pose risks to LatAm’s trade outlook.
• Climate change disruptions, such as droughts in the Panama Canal and floods in Brazil, threaten key supply chains.
• Geopolitical tensions (Ukraine war, Middle East conflicts) could destabilize commodity markets and global trade flows.
• Trade policy shifts, including potential protectionist measures in the U.S., may impact LatAm’s trade strategies.

CURRENT AFFAIRS

Mexico: Airport operator GAP will invest $2.5 billion through 2029 to expand capacity by 50% across its Mexican airports. The plan includes a new terminal in Guadalajara, expansions in Tijuana and Los Cabos, and a project in Puerto Vallarta to double its capacity. GAP, which operates major tourism hubs like Puerto Vallarta and Los Cabos, aims to support Mexico’s economic growth and tourism sector.

Argentina: China’s Ganfeng Lithium has started production at its $790 million Mariana lithium project in Salta, aiming to produce 20,000 metric tons of lithium chloride annually. The company also built a $190 million solar park to power the plant. President Javier Milei's administration has welcomed lithium and copper investments, though some projects face delays due to falling lithium prices.

Brazil: Agricultural research agency Embrapa is launching a 12-year cannabis research program, aiming to adapt the crop to Brazil’s climate and establish regional production hubs. The initiative, pending approval from health regulator Anvisa, follows a court ruling legalizing hemp cultivation for medicinal use.  While recreational marijuana remains illegal, Brazil could see large-scale hemp production in the future, with potential economic benefits similar to its soybean boom.

FURTHER READING

Check our recently published insights here. Recent post:

🌎🍎 Latin America's Impact on Global Food Security

• Major Global Supplier – Latin America produces 25% of the world’s agricultural exports, with Brazil and Argentina leading in soy, beef, and grains.
• Food Insecurity Paradox – Despite its export strength, 230 million people in the region face food insecurity due to inequality and rising prices.
• Climate & Environmental Challenges – Deforestation, water scarcity, and extreme weather threaten long-term agricultural sustainability.
• Strategic Opportunities – Investments in agri-tech, sustainable farming, and infrastructure can enhance food security locally and globally.

📖 Read more here.