About Oil, Coffee and Other Export Products in Colombia.
According to the latest official information, Colombian exports reached a value of 3.810 million dollars for the month of february, a decrease of 10% compared to a year ago.
As is known, the country mainly exports primary products which do not contain added value but are extracted and exported as they are in their natural state. This is unlike other emerging Asian countries such as Taiwan and Vietnam that have specialized in products for electronic use such as chips and others already considered high income countries such as South Korea.
Colombia is considered by international organizations as a middle or upper middle income country and continues to export only products considered as natural raw materials and particularly oil and coal, which are polluting fuels, while other Latin American countries such as Chile, Peru and Bolivia export copper, lithium, silver, tin and gases, all products considered non polluting and are also its main source of external income.
Therefore, Colombia is at a comparative disadvantage with those countries since in the next 50 years the world trade in coal and oil will be reduced to be replaced by clean energy.
Mexico also differentiates itself since with its trade agreement with the United States and Canada it has diversified its exports, directing them towards industrial exports rather than oil.
Colombia currently, as mentioned before, has 54% of its total exports in oil and coal, which makes it very vulnerable to the falls in global demand that will occur in the next 20 or 30 years. These exports are followed by agricultural products with 25%, including green coffee, flowers, fruits such as bananas and live cattle.
All of the above exports do not include the generation of added value but are basically products extracted from nature and thus taken abroad and only 21% are exports of industrial origin and with some added value or international value chain.
It is also necessary to note some deficiencies that Colombian exports have. In fact, although the country exports crude oil as its main product, it also refines a part of it to produce gasoline for domestic consumption, but it is insufficient, which is why it must import it.
In coffee, Colombia exports green coffee (and not in the form of soluble coffee) and goes to Europe and the United States where it is processed and sold for global consumption there as soluble coffee with the consequent profits that multiply in its supply chains commercialization that ultimately leads to the consumption of a cup of coffee, as in tourist sites with a high value such as 5 or 10 dollars per cup, while in Colombia green coffee is paid to the Colombian coffee grower only at the New York stock Exchange price that fluctuates around 2 dollars per pound and also that small coffee growers are 95% of the total producers and have crops of less than 5 hectares.
Coffee has lost world markets and is no longer the second exporting country that it was in the sixties and seventies behind Brazil and currently occupies third or fourth place, giving way to Vietnam and Indonesia and only represents 5% of the total Colombian exports. In domestic consumption, the country brings coffee from neighboring countries to meet domestic demand.
It should also be noted that Colombian industrial exports are lagging in total exports due to the delay in the country's industrial development, Colombian producers need to invest in technological innovations to produce at lower costs, they must replace obsolete machinery and so on be more efficient and competitive at a global level, a necessary condition for insertion into global value chains.
The country has been in decline for more than 11 months in this sector and therefore job creation is scarce. In terms of workers, it is far surpassed by commerce, agriculture and public administration.
