Friday 26 February 2021

Coronavirus: What are the Impacts for the Region?

There has not been a single confirmed case of the new coronavirus anywhere in Latin America

Business people in Central America agree that because of the Coronavirus that has been spreading from China, global supply chains have been disrupted and commodity prices have fallen.

Passengers are seen wearing masks at Galeao International Airport in Rio de Janeiro, Brazil following the Coronavirus outbreak. Photo by Fabio Teixeira/Anadolu Agency via Getty Images

An analysis by the Guatemalan exporters’ union states that among the risks identified as a result of the outbreak of the coronavirus, is the possible irruption to the supply chains of Guatemala and Central American industries, by identifying that China has become one of the 3 main countries of origin of Guatemalan imports.

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The Agexport report states that “... Among the main imports from China are the following products:

  • Transmitting and receiving devices
  • Mechanical machinery and equipment for electronic applications
  • Textile materials
  • Vehicles and transport equipment
  • Plastic materials and their manufactures.

If there is an irruption in the supply chains, it could come from one of these products, although it is still an uncertain situation and depends on the times of dispatch and delivery agreed, which usually have months in advance, details the document.

The Agexport analysis concludes that “… The long periods of advance for supplies allow companies to re-evaluate their stocks with a prudent time to avoid stoppages in their production chains, although everything depends on the development of the virus in China and the capacity of the authorities to control and neutralize it.

“The drop in consumerism in the areas under quarantine, the few people at the ports and customs, and the long lines of containers in Chinese ports are the main symptoms of the damage the virus is causing to Latin American exports, in particular South America.”

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Panama is another country that was affected by the spread of the disease, as shipments of Panamanian beef that arrived in Wuhan in early February could not be delivered, because of the health alert in place.

The report conculdes, “For now, the economic effect has not had a strong impact on Guatemala, due to the distance and shipping times to/from China, but a possible disruption to the supply chains that supply finished products or raw materials from China is not ruled out.” See full Agexport document (in Spanish).

America’s Quarterly reports that China’s reduced economic activity could have a significant effect on Latin American exports. “Except for Mexico, China is a major destination for products from Latin America’s largest economies, and is the number one trade partner for Brazil, Chile and Peru.

“Primary sector goods and commodities comprise the bulk of the region’s Chinese sales. China purchases a hefty portion of the copper and other industrial metals produced by Chile and Peru. It is also the main buyer of soft commodities and agricultural and forestry products from Argentina and Brazil (as well as Chile and Peru), and a major consumer of Colombian and Ecuadorian oil and Brazilian iron ore.”

“How serious is the risk of the coronavirus spreading to Latin America and the Caribbean?” asks the Latin American Advisor.

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Fiona Mackie, regional director for Latin America and the Caribbean at The Economist Intelligence Unit said: “Although there is still a lot of uncertainty around the eventual path of the coronavirus, there is clear evidence already of an impact on emerging market financial markets and on commodities that will transmit rapidly to Latin America, and especially South America’s large commodity exporters.”

“There will be a direct impact from reduced trade with China, and the region’s open economies that export a lot to China will be particularly vulnerable here,” added Mackie.

Screenshot of Spglobal.com article on Coronavirus Impact

On the question, “Is the Coronavirus a Major Threat to Latin America?”, Margaret Myers, director of the Asia & Latin America program at the Inter-American Dialogue said: “Fortunately, there isn’t yet any evidence of the novel coronavirus having spread to Latin America, but some countries in the region are already feeling the outbreak’s economic effects.”

 

Reuters reports that the coronavirus outbreak in China may be altering the 2020 investment outlook for Latin America. “The consensus among economists is that while the overall impact on Latin American growth and financial markets from the outbreak will be limited, there may be wide divergences across the region.”

“The most exposed economies are Chile, Peru, and to some extent Brazil,” said Alberto Ramos, head of Latin American research at Goldman Sachs. “The key source of downside risk to LatAm is a deterioration of the terms of trade triggered by deep long-lasting impact of a China slowdown on commodity prices.”

There has not been a single confirmed case (as of February 25, 2020) anywhere in Latin America of the new coronavirus. However, there are suspected cases in two countries, Brazil and Colombia.

An analysis by pharmaceutical-technology.com:

An analysis by pharmaceutical-technology.com:

Brazil has six coronavirus suspected cases as of February 17, 2020, including three in Sao Paulo, one in Parana, and two in Rio Grande do Sul.

Following the announcement of first three suspected cases of coronavirus in Brazil on 28 January, a higher number of suspected cases was being announced. Brazil had 14 suspected cases as of February 3, reported in the states of Sao Paulo, Rio Grande do Sul, Santa Catarina and Rio de Janeiro.

The government repatriated 30 Brazilians from Wuhan. Two Brazilian air force planes carrying the passengers arrived at a military base in Anapolis in the state of Goias on 09 February, the New York Times reported. The passengers have been placed under quarantine for a period of 18 days.

The first suspected case of the coronavirus infection was reported in Colombia on January 27, 2020. A male passenger arrived in Cali from China passing through Spain and the US. The patient showed symptoms such as fever and respiratory troubles. Samples for testing were sent to the Centers for Disease Prevention and Control in the US and returned to be negative.

As many as 50 suspected cases have been reported in the country, as quoted by Reuters. One confirmed case of a Colombian national has been reported on the Diamond Princess cruise ship. The patient is a crew member on the ship and has been shifted to a medical facility in Japan.

Colombia announced on February 5 that it was the first country in Latin America to perform its own diagnostics tests for coronavirus. The tests can deliver test results in a span of 24 hours.

The Colombian government is also planning to evacuate a total of 14 citizens who are currently stranded in China.

To date, there are 80,299 confirmed cases of the coronavirus, with 2,750 deaths, affecting 37 countries. Visit the Covid-19 microsite for the latest coronavirus news, analysis and updates

 

 

 

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FACT CHECK:
We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

Ricohttp://www.theqmedia.com
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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