To Import or to Export?
Many are the variables affecting international trading flows. Some of them are conjunctural, like the War Zones, and some other show measurable trends that can be analyzed, allowing us to react in a planned way, such as currency flows or oil prices.
During 2012 and 2013 the cost of fossil fuels increased over 7%, while the CPI increase was 4.3%. The difficult situation in the Persian Gulf, where 1/5 of world's oil supply passes, the strenght of the Dolar as main currency and the new taxes propitiated the rise in oil prices. This translated in higher import costs, which encouraged domestic trading. Also, the fact that the last two years the Euro has consistently going down and getting closer to the Dolar has made European products more competitive in the international market, particularly compared to those countries using the Dolar as a model for their prices. On the other hand, China started these years to grow in its domestic demand, which moved the spotlight from export to import.
For several months now we have been reading and hearing in professional forums, business circles and specialized media insistent rumors about the increasing cost of importing, as well as about the propitious conditions of the market to export. And yet exports have increased only a 1.8% in 2014, while imports have grown over 8.4%. Then, where are these rumors coming?
Usually most of individuals from any group are not aware of the context they are moving in until they get access to already processed information (statistics, analysis, articles...) which turns yesterday's picture into today's news. What is now an insistent rumor refers to a situation that doen't fit anymore in what is currently happening.
In spite of increasing geopolitical conflicts in oil producer countries, the price of fuel is falling down. This is mainly due to the fact that the USA, the biggest oil consumer, has become almost self-sufficient. There is a hole in international fuel consumption, and many countries refuse to adjust production for fear of losing market share. Therefore, offer is higher than demand, lowering prices.
The sudden slowdown that European economies are experiencing, as well as increasing doubts regarding growth in Latin America, are making harder to export to these markets. China's expectations are also unfulfilled, and there is a fear that China's economy will stop it's highspeed growth, paralyzing domestic consumption and focusing producers again to external markets.
Does this means that rumors are false? No. Despite lower groth in 2014, exports is the vehicle through which Spain is leaving recession. More and more businessmen understand the need to grow outside and lose fear to explore new markets and oportunities. The conversion Euro/Dolar continues to level, favouring European prices, and most of European and Middle East conflicts do not affect Spain directly. Spanish advantage lies in the fact that, in a globl market in which most of the main agents are struggling, Spain is capable of offering competitive prices with a first-class commercial service.
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