Peru import/export update

1) Peru's climbing exports have allowed it to import greater quantities wthout disrupting the balance of payments or putting pressure on its currency.

2) Mining exports have been the big driver of all exports.

3) Quantities mined of all the top metals have either been static or dropping, with very little evidence of more production added to its industry.

 (click to enlarge any chart)

In other words, Peru's expansion isn't some government-led miracle, it's a country that hasn't done a thing to expand its productive base and has ridden its luck on the world commodity price rise.

Bottom line: Peru is an economic luckhouse, not an economic miracle.

Setty calls out the bizmedia on Venezuelan oil

This links to a great post and puts numerous newswires, media outlets and analysts to shame. Here's how Setty kicks it off, click through to read the rest:

Is there anyone out there who gets the numbers right on Venezuela oil shipments to the USA? Not as far as I can tell. Everybody — Reuters, Barclay’s, you name it — reports a U.S. import figure that is much lower than the reality. Here’s why, and how to avoid this common error. Note: If you are frightened of Microsoft Excel, skip this post and keep reporting the wrong number. Nobody cares except me. In fact if you do it my way you will piss off your boss, because it makes Venezuela look better than the EIA numbers. So really, just ignore this post. Truth will get you in trouble.

Continues here.

Import control news from the unserious country

Yes, it exists. Be very afraid

Clarin today has a report on how Argentine Commerce Secretary and Kirchner stalwart Guillermo Moreno has been clamping down on imported goods since April in order to defend national production against foreign goods making their way in (and seriously pissing off foreign countries, some of whom are making their views clear to Klishtina in Spain this week). The report talks about the green and red highlighter pens used by Moreno to decide whether this-or-that product is allowed into the country, how companies as big as Kraft have had to beg for up to a fortnight to get consignments of chocolates into the country and how products such as tinned peaches, olives, cheeses and all types of pastas are given an automatic red light.

However, one specific import doesn't have a problem. Scotch whisky get in because according to Moreno (quoted anecdotally), "Whisky can come in, but only because (the whiskies) produced here are disgusting."

For what it's worth, personal experience says he's right about the Argentine whiskies. This still makes Moreno a dumbass, but at least he's a dumbass with a palate.

H/t los tres chiflados

Where the oil comes from (guest post)

My man setty over at his blog settyblog (friends only, sorry) wrote this post today. After asking nicely he let me re-post it here. So here it is. Enjoy.

Where The Oil Comes From

U.S. government and news preoccupation with Venezuela isn't just because the country is ostensibly leftist. It's got much more to do with Venezuela's role as the U.S.'s second-most important oil supplier.

The U.S. had net imports of oil, coal refined products and electricity from 62 countries in 2009. This diversity conceals the concentration of suppliers.

Data provided by the U.S. Department of Energy also mask the importance of imports from Venezuela. This page, updated monthly, ignores both U.S. exports and (because the statistical series started in the 1940s, before the Virgin Islands was a major U.S. import point), treats the U.S. Virgin Islands as a foreign country. Since Venezuela provides two thirds of the crude for the Hovensa refinery on St. Croix, that takes many Venezuela barrels out of the ranking.

This U.S. Commerce Department data is the first place I've found that adds up U.S. net exports and imports of oil tallied by country and by dollar value, rather than by barrels. It turns out that the biggest net suppliers to the U.S. in 2009 were:

Canada $54.1 billion (25% of total)
Venezuela $26.4 billion (12%)
Saudi Arabia $21.5 billion (10%)
Nigeria $18.7 billion (9%)
Mexico $17.5 billion (8%)
Russia $13.1 billion (6%)
Algeria $10.6 billion (5%)

That's 75% of the oil imports coming from seven countries.

To understand the importance of a diversity of suppliers to a consumer like the United States, I highly recommend this documentary. In particular the part around 8:48.

A bit of Colombia trade

I know what you were thinking as you woke up this morning, dear reader. You stretched, yawned, made for the shower and thought to yourself, "I wonder how the Colombian trade balance has performed in the last three years or so?", so fortunately IKN is here to help you out on that burning question.

Here's the monthly import and export figures for Colombia in the period January 2007 to January 2010.

As we can see, the country went through the same sales slump (both inbound and outbound) as the rest of the region thanks to the financial crisis. We also see a slow but sure rebound in 2009 that has put the worst behind it but still isn't close to the 2008 good times. So yet again, you're going to have to take the rah-rah brigade's GDP growth fanfares with a large pinch of salt this year, as the better comparative will not be Year-over-Year but 2010-to-2008.

As for the exports mix, this zippy chart put together above shows the percentage take-up of its main exports. Surprisingly coffee is but a minor part of the mix, with the big big growth seen recently in hydrocarbons (oil, gas etc) and coal (which is a hydrocarbon in itself, I suppose). Together, oil/gas and coal in Jan'07 was less than 40% of Colombia's exports, but in Jan'10 that percentage was nearly 59%, a big upmove in just three years. Ferro-nickel used to be a bigger slice of things, but it not no more.

Put simply, Colombia doesn't give a rat's gluteus maximus if Chávez stops buying its textiles cos it's now busy enough selling oil to the gringos. Mojitos served, the end.

Peru import/export update

We haven't done this for a while, so last week's publication of Peru's January Imp/Ex numbers gives a good time to check out the state of play.

Let's start with exports-only. There were superduper fanfares in the local press about exports rising 44% or 48% or some weird number, but a more careful look at the numbers show that January 2010 compares very closely to Janaury 2008. In other words, two years have gone by and the net result for the country is zero.

click on charts to enlarge

On the one hand, it's a good thing to see Peru coming out of the crisis trough of course. However, it hardly merits the rah rah you hear (and keep hearing all year) of the YoY comparatives that get spun out of Lima.

Also let's note, once again, just how little Peru's export mix has evolved. It's still a primary materials monoculture with metals (mainly copper and gold) making up the largest chunks of the total. How do you add value to a 1kg ingot, Twobreakfasts? Meanwhile, other traditional exports have trodden water along with the non-traditionals too. Here's the percentage breakdown of exports for January 2010:

Mining exports: 62.48%
Other Traditional Exports: 17.2%
Non-Traditional Exports: 20.31%

Peru's historic exports mix is with 60% metals....nowadays it's even higher. So much for the productive "miracle" of Peru's growth, which in fact rests squarely on the shoulders of large world miners that remit all profits back to Canada, Australia, the USA, the UK etc. Viva investment grade, baby...

Now comparing imports to exports, we again see that 2010 is no better compared to 2008 or even 2007, such is the inertia.

A recovery is on? Yes no doubts, with that steady climb in imports underlying the good news. Anything better than 2007 or 2008? Nope. So next time the headlines scream the Kool-Aid at you, remember the real context of the "growth" figures that you'll see out of Peru this year.

Argentina exports up 1% YoY in November

For the first time this year, Argentine exports have posted a YoY monthly increase. Exports for November 2009 totalled U$4.934Bn, up from the U$4.894Bn posted for November 2008. Here's the overview chart of exports and imports for Argentina since January 2008.....

....and it's a similar shape to plenty of other regionals (Peru, Chile etc). Again, it goes to show that no matter what political or economic system you have in place, if your country relies on exports for growth you get screwed exactly the same way and then you come out of the hole at the same time.

Just don't tell Moody's, the IMF, dumbass LatAm biz reporters, dumbass op-ed writers etc etc etc

So how's that Peru economic miracle coming along, Otto?

Hmmm, not so well, actually.

The Peru stats dudettes and dudes at INEI released their impex numbers yesterday and the result is above. Imports were down a whole bunch YoY (natch) but for the first time in 2009, the import number failed to beat the previous month's figure (EDIT 10 mins later: clearly not true, as May 2009 was very weak for example. I need to stop sniffing glue while writing).

As for those exports, let's just remind ourselves how utterly reliant Peru is on mining.
And just as a thumbnail example to explain how little of all that wealth is seen by Peru's people, a full 13% of the mined metals above are gold bars shipped directly to Switzerland and stuffed into some vault in some bank. Yup, that's gonna aggregate value, innit....

Economists, pundits and experts (epithet used very loosely) have made fools of themselves all year by talking up Peru, but now even the overly proud stuffed suits have been tasting humble pie...to a certain extent, anyway. Take, for example, Daniel Volberg of Morgan Stanley who wrote yesterday....

"Peru has proven less resilient to the downturn than we had expected after we revised up our regional outlook back in June."

....which is an economists way of saying "we were total idiots about Peru and were stupid enough to believe all the hype". But it doesn't stop them from talking up the country in 2010, either. Ever hear the story about the boy who cried wolf, dumbasses?

Chart of the day is...

..Peru's import and export figures per month, January 2008 to August 2009.

The latest imports figure came out over the weekend (exports for August not available yet) and the number was 31.4% down from August of 2008. Also, there are are two more hevy impex months (Sep and Oct 2008) to burn through before Peru gets YoY numbers that it can improve upon.

On the plus side, there is clearlt a slow, gradual increase in the monthly numbers for 2009. This is as much to do with the typical 12 month business cycle as anything else, but it must be a positive that the last four months have shown continued improvement.

The bottom line is that Peru has been through a hard landing, though you'd never believe it the way the idiots that ran them over the cliff are lauded by the idiots that encouraged them. But life goes on and the world has decided it wants copper and gold in 2009. Peru got lucky.

Peru ImpEx June 2009 numbers are out...

...and it's the samo samo. For the eleventh month in a row the figures are down YoY.

The main culprit on the exports side is the price of copper and its base metals friends, as 60% of exports from this monocultural economy are metallic. On the imports side, capital goods and construction primaries imports are down 45% and intermediates down 43%. As an aggregate, Peru's trade with the rest of the world is down a whopping 32% and that will only get worse for the July numbers due to the absolute peak in metals revenues for that month in 2008. But don't worry, because everybody's investing in Peru right now according to the government...these numbers can't be right...can they?

How these liars and charlatans must be looking forward to November when they can finally point to a YoY increase in things, but that will only be because world metals prices are better than they were back then. Economic miracle? Gimme a break!

Metal up = Peru up.
Metal down = Peru down.
End of story.

Peru's ImpEx update

Let's catch up with a bit of macro and see how those Peruvian imports and exports have been doing this year. The last time we did this post was January or February so there's been a lot of copper sent to China and gold to Switzerland since then.

This first chart shows monthly bars for both imports and exports.

In 2009 exports have recovered somewhat (thanks mainly to the rebounds in copper and gold) but are still well off 2008 highs. Imports have been in the gutter all year, the same levels as 30 months previously. Where's this "vibrant internal economy" that S&P talked about when affirming its ridiculous investment grade on Peru? IKN calls bullshit on another band of self-righteous, arrogant fools in suits.

The trade balance (below) has therefore gone to the surplus after the iffy moments at the turn of the year, again largely due to the metals rebounds (for the record metals accounted for 59.8% of Peu's exports in the first six months of 2009, pretty much the average that fluctuates around the 60 mark). This has helped stabilize the currency (PEN) which is good. Export dependent countries with non-reserve currencies can't spend more than a few months out of surplus before currency weakness starts notching inflation up. In 2009 Peru has inflation nicely under control, happy to say.

So if we add up the imports and exports to show (below) total trade activity with the rest of the world, 2009 has recovered a bit but there's a country mile between current trade and the numbers being posted this time last year.

The bottom line is that we have a country with a stagnant internal economy that got lucky and has been saved by the metals rebound. No more, no less. Find the Peru Central Bank source report on this link. If this is an economic miracle then Britney Spears' children were virgin births.

Peru: Can I Haz Scotiabank Job?

It must be a truly great thing to land a job as an economist in a Peru bank. Two main reasons:

1) If you have a brain there's no competition

2) Say what you have to say in the right way and you get quoted everywhere by the lapdog press. World of Ego, here we come.

Case in point, Pablo Nano of Scotiabank. Señor Nano yesterday predicted that Peru's trade balance would come out positive in June, which is largely along the lines of predicting that the sun will rise tomorrow morning or that the current Pope is of the same religious creed as the previous incumbent Holy Father. What you have is a rapidly shrinking economy and deflation on one side (imports down? Duh!) and a rebound in metals prices as China buys up all that lovely copper and Switzerland squirrels away as much gold as it can get from Yanacocha and Pierina. Or in the words of Pablo, "The May numbers show on the one side a sustained recovery in exports and on the other a larger than expected drop in imports". No shit Sherlock.

And sure enough, today's imports numbers confirm that Peru's real economy is diving into an ever deeper recession. YoY imports are down 39.6% (really..not joking), with the worst affected sector that of capital goods and construction materials, down 44.9%. That makes the first six months of 2009 down 30.1% from the same period in 2008, so if you care to think about it, 30% in six months and 39.6% last month.....means......that....yep...it's getting worse, not better.

But Peru isn't in recession....oh no, whatever makes you think that?

UPDATE: A very sad but very true observation comes from regular reader Ward in the comments section below. Here's the excerpt:

"...the fact that you typically need to be (very) young, female and goodlooking to be hired by a Peruvian bank may not bode well for having the most qualified people for the job."

You sure that Colombian coffee is from Colombia, Señor Valdez?

There's something fishy going on in the Colombia coffee world and it might be time for Juan Valdez to swap that donkey for an alpaca.

In a good report yesterday, Bloomie's Heather Walsh caught up with Jorge Lozano of the National Association of Colombian Coffee Exporters who predicted that, due mainly to inclement weather factors, Colombia would produce less than 11 million bags of coffee this year for the first time since 2001. For the record a "bag" weighs 60kg, so as 2008 production was 11.5m bags we're looking at a difference of 30,000 metric tonnes (hey, lotta coffee there people..world's third largest producer after Brazil and Vietnam). Lozano is quoted as saying;

“The figures we’re seeing show a substantial reduction. Eleven million would be a miracle....Colombia has been selling all of its production.”

Indeed it has been selling it all. Keen to do it too, as coffee is one of the main export products of the country and is driven by the famous Juan Valdez "100% Pure Colombian Coffee" campaign as the dude and his donkey wander over the TV screens of the USA. But is it that pure? This year there's good reason to suspect that those 100% Colombian beans are currently being cut with coffee imported into Colombia from other countries.

Exhibit one: This report in Peru's El Comercio that has local coffee growers complaining about unfair competition. Apparently Peruvian coffee growers have been selling a lot of their wares to Colombians for better prices than they would have obtained by selling on the open market or via established deals and the Peru coffee people are worried about making the contracted quotas due to this selling to Colombia. El Comercio reports the words of César Rivas Peña, head of the National Coffee Group, in the following way:

Mysteriously, so far this year 132,000 quintales of coffee have been sent to Colombia when normally only 80,000 are sent.

As a Peruvian "quintal" is a measurement of 46kg, this means that so far this year 6,072MT of Peruvian coffee beans have made their way into Colombia, or in other words 1/5th of Colombia's theoretical YoY shortfall.

Exhibit Two: Your humble servant wondered whether Colombia's stats office, DANE, was also registering higher coffee imports this year. So off I trotted to the DANE site and got to the right page (if you really care and are as wonky as me you need to click "annexos estadísticos 2009 (Marzo)" to get the right XLS file to pop up and then it's the line item 24 on the Excel page A11) and sure enough, the diligent people at DANE had registered an increase in coffee imports in the first three months of 2009.

An enormous, eye-popping 405% increase, in fact (yes, that says four hundred and five percent). Imports of "coffees, teas and infusions" (read 'coffee') have risen from 1,412MT in the first quarter of 2008 to 7,134MT in the first quarter of 2009, a difference of 5,722MT. It also means that if Colombia keeps importing at the same rate throughout 2009 it will end up buying around 28,500MT of foreign coffee...which is weirdly and strangely close to the 30,000MT production shortfall predicted by Jorge Lozano in his interview with Heather Walsh. On another level, by cutting that down into monthly averages it means we can estimate 2/3rds of the coffee imports have so far come from Peru. It remains to be seen whether Peru will keep supplying Colombia at such and accelerated rhythm, however, if its own export association is starting to cry foul.

Exhibit three: And here's the strangest thing. While Jorge Lozano, a 79 year old past master expert of his field, was telling Bloomie that 11m bags in 2009 would be "a miracle", the Colombian minister in charge of the coffee sector was making soothing and smoothing noises to the world in London today. Colombian Agriculture Minister Andres Fernandez Acosta was quoted by Reuters as saying:

"We have no defaults at the moment and we won't have defaults. Because of weather conditions there have been delays. By June everything will be in place and we will have no problems meeting our commitments."

He then went on to say that Colombia's 2009 production would be 11.5m bags, a full half a million bags (and again, that coincidental 30,000MT) greater than Lozano's "miracle limit" of 11M bags.

Conclusion: It looks to me as if Colombia isn't going to live up to its advertised "100% Colombian" claims this year. That a political talking head can predict a substantially higher harvest of coffee than someone who knows the industry backwards and has worked in it all their life is one reason to be very suspicious. That Peruvian coffee producers are complaining of unfair competition from Colombian buyers who are snapping up their coffee (and not any old bean either, as Peru complains that Colombia only wants its top "export quality" product). And the sudden 400% increase in coffee imports registered by the Colombian stats office gives the issue a numerical backbone, too. With all the numbers (the shortfall, the imports, the ministerial overestimation) all hovering around the 30,000MT mark the coincidences become too much to ignore.

So next time you enjoy a cup of Valdez's "100% pure Colombian" finest, don't fret too much if you start having visions of the Nazca lines or Machu Picchu.

Peru economic "growth": it's not just me that sees through the lies

What Otto feels like when told Peru is growing

A sigh of relief was heard Chez Otto this morning when your humble correspendent read that respected and independent Peru econ-watchers aren't buying the BS soap soap lies about Peru's fantasy growth that's constantly spun by its most awful of governments.

Hugo Perea of BBVA bank was asked by El Comercio to comment on yesterday's announced 7.45% drop in manufacturing activity in February. Acording to Perea, the March figure (currently estimated at -3% by the gov't liars) will come in much lower, more like -7% again, noting invenmtory levels dropping rapidly amongst other telltale signs. Another indy consult group, Maximixe, was asked about the outlook for April and May and also came out with a dose of necessary reality; "Our scenario is pessimistic, because there are still sectors with important weightings in our industry that are declining."

Meanwhile, Peru's chamber of exports, ADEX, had this to say. "We were hoping that things would get better in March, but they continued dropping. And acording to our associates things will continue showing a similar behaviour in April and May, as there still do not exist signs of recovery."

Yes indeed, folks. Reality. This is the country run that depends on trade with the world to survive and grow that had an YoY drop in imports of 11.2% and a drop in exports of 9.6%....and the self-serving corrupt liars that run the show insist that Peru will grow by 4% this year.

Wanna buy a bridge?

Peru macro update

First the good news; Peru managed to run a small trade surplus in February. This will take some pressure off the currency (as usual, click on any chart to enlarge);


Now the bad news. Exports might have been up slightly on January numbers, but February is like that. But exports also showed their second worst month since January 2007. Imports didn't fare much better, registering their lowest month since June 2007.


But the really bad news is when you add up total import/export activity. Total trade movement is down 26% in the first two months of 2009 compared to the same period of 2008.


Why is this important? Because total impex movements comprise around 50% (yeah, fifty percent) of Peruvian GDP. So much for Twobreakfasts and his shock-proof economy, as Matuk so rightly points out today.

And on the subject of Peruvian economics.......

....the Peruvian Central Bank's (BCRP) newly revised forecast for 2009 has some very strange assumptions. This report from Reuters lays out the general scenario, but the key changes are:

• Domestic demand down from 7.1% to 5% growth
• The projected fiscal surplus of 1.1% is now a fiscal deficit of 1.0%
• Export growth down from 6.2% to 1.9%
• Import growth down from 9% to 2.1%
• Inflation down from last year's posted 6.65% to a forecast of 2% in 2009
• The GDP growth forecast is unchanged, staying at 5%

If this isn't bistromatics of the highest order, I'm Chinese. And I'm not Chinese. Look, even taking the BCRP's own metrics don't you think that simple logic points you in the general direction of saying "This is BS, dude"? Seriously, how can domestic demand, imports, exports and inflation all drop and the GDP forecast stay the same? And that's only the start of things, really. Here's a chart showing Peru's exports in the period 2005 to February 2009:

Please note the Feb 2009 figure is the total and not broken down into
mining/non-mining parts as the figures are not yet available at BCRP

Can you seriously tell me that Peru is going to beat its 2008 export total this year? Even Carranza's Finance Ministry recognizes that exports will drop from around $32.47Bn to around $28Bn this year (which is also exaggerated imho, it's more likely around $25Bn), so I'd be interested in finding out what BCRP top cheese Julio Velarde was smoking when he came up with a 1.9% YoY export growth prognostication. To labour the point, Peru is staring a 15% to 20% drop in exports in the face, not 1.9% growth.

It's the same story with imports, of course. Growth in 2009? Oh c'mon guys, at least make your bullshit survive more than a cursory glance at reality.

Click to enlarge charts

It does make me wonder what Velarde is trying to achieve here. I actually basically respect the guy and know full well he's not a klutz. Perhaps by making such outrageous claims he's trying to send a signal to people that look further than the headlines in El Comercio. Perhaps he's trying to say "Twobreakfasts is making me manipulate the GDP number, so I may as well make them look as silly as possible". I'm just trying to find a thread of logic where there is none.

Peru: Does this look like a solid economy to you?

Words kept to a minimum this time as the charts can largely speak for themselves. This chart shows how Peru is now running a commercial trade deficit with the rest of the world. Not good.

This next chart shows that even though there's a fast-growing deficit, imports are actually dropping! It's the enormous cut in exports that's doing the real damage.

Here's a closer look at how much imports have dropped. Peru imported $400m less worth of goods in January 2009 compared to the same month of 2008.

But the equivalent chart for exports below is simply frightening. That's a drop of nearly one billion dollars in exports compared to the same month of 2008. This is a 100% non-sustainable situation for an emerging market country that depends on selling to the world. This cannot be stressed too strongly.

If we aggregate monthly imports and exports it gives a good idea of the enormous drop Peru has seen in trade with the rest of the world since the middle of 2008.

The Garcia administration is almost certainly most irresponsible government in Latin America. It refuses to admit there is a problem when it's staring anyone with a modicum of numbercrunching ability in the face. Peru's impex trade with the rest of the world has dropped by over $2.5Bn PER MONTH since last August and the country is now running a significant fiscal and trade deficit. This kind of obvious structural weakness will not be patched up by Carranza's much-trumpeted U$3bn stimulus...and half of that has been spent already!

Your choice: Stop believing the BS soft soap that Garcia, Carranza, S&P and Fitch tell you about Peru right now, or stop believing them when it's too late. But don't tell me I didn't warn you.

Related Post
Stop Peruvian Stupidity

Alan Garcia is a liar: Some empiricals

At the same time President Twobreakfasts was waxing lyrical about Peru's stability and how it was shielded from the world recession and how Peru's GDP would grow 6.5% in 2009 (date, November 2008), the following was happening to Peru's trade balance:

And as bad as that chart looks, if you look further it actually gets worse. This second chart shows the import/export breakdown that results in the above trade balance. As you can see, the slowdown in both sides of the equation adds further recessionary pressure:

Developing nations such as Peru rely on export capacity to drive economic growth. No exports = no growth. That's a bit of cruel reality Economics 101 for you, dudes. S&P, Fitch and all the others can try to hoodwink you into believing that the internal economy is Peru's new driver but that is just so much crap, sad to say. Peru is not a strong currency nation that can run an indefinite trade deficit with the rest of the world; its ability to grow is totally dependent on its ability to sell to other places. And that chart up there is not good news.

It's not about unduly knocking a country or a region (as accused yesterday by some dumbass), it's about looking at the facts, telling the truth and not listening to obvious bullshit from obvious bullshitters. The main reason why Peru is in more trouble than (for example) Chile is that Chile is being mature about its future problems. The government of Peru is still jawboning its people into believing that everything is fine. That Peru GDP forecast is now down to 5%, by the way. It's going lower. Take that to the bank.

Brazil's economic turndown in one easy-to-understand chart

Holy Caipirinhas, Batman. Check out how Brazil's impex trade has just fallen off a cliff. Click this link to download the chart (sorry, I'm too dumb to work out how to peg a chart ripped from a PDF into a blog post). The chart is VERY scary and should send a shiver down the spine of every single LatAm economist and/or market watcher. It might even interest intelligent people, too.

A pity I can't work out how to put it directly on site. Any smart people know a way? The chart taken from the Datamar shipping weekly, who sourced it to Brazil's MDIC. You don't need any further comment from here, methinks. Is Mark Mobius still buying Brazil?

UPDATE: One smart reader later, here's the chart. No need to click that download link now.


Thanks, 'R'

Peru set to lose U$4Bn in exports in 2009...just in copper

Peru not dependent on mining any longer? Don't be stupid

Some basic numbers: This year Peru expects to finish with exports of U$32Bn, 19.2Bn of which being metals exports. The big two metals are copper and gold which together account for over 70% of all metals exports by dollar value (precisely 70.7% in the first ten months of 2008, copper U$6.85Bn and gold U$4.67Bn from a total of 16.27Bn).

However, in that 2008 period copper averaged U$3.14/lb. Hey, guess what? Copper's going to be cheaper next year. This table shows how 100,000 metric tonnes copper exports per month will turn into dollars at various spot prices. In fact, although it fluctuates by a couple of thousand tonnes per month Peru averages 99KMT right now so we're pretty close to the real numbers.

Peru Copper Export Revenues
Cu $/lb	Est. Annual Value (U$M)
1.20	3168
1.40	3696
1.60	4224
1.80	4752
2.00	5280
2.20	5808
2.40	6336
2.60	6864
2.80	7392
3.00	7920
3.20	8448
3.40	8976
est. Month exports 100,000MT Cu

As we can see, if 2008 finishes by averaging $3.00/lb and 2009 finishes by averaging $1.40 or $1.60/lb (quite likely considering today's spot price and '09 predictions from this-and-that industry body or spokesperson), the difference for Peru will be somewhere around four billion US dollars in lost exports revenues. And when you consider that this is just copper, and other heavily hit metals exported by Peru include siver, zinc, lead, iron, molybdenum, tin etc the picture isn't very pretty. Even the more promising gold will have to average around U$870/oz in 2009 to beat out 2008's country revenue total (assuming export volumes remain the same).

So, that's U$4Bn disappeared from the trade balance for 2009. Here's the monthly trade breakdown for Peru in 2008.........

..........and in the first 10 months of this year Peru has managed to put in a surplus of U$2.8Bn. Yeah, you got it; just the copper loss is going to screw the trade balance in 2009. Just copper.

So forget about the fishmeal dispatches that will drop, the asparagus exports that Costco and WalMart will trim, the grapes that Japan won't order this year, the job losses, the greatly reduced royalty payments and all that jazz. Just remember that over 50% of Peru's corporate tax is paid by miners. So the next time some idiot tells you that Peru is not going to be affected by the world economic downturn, send them the link to this post. And then tell 'em to STFU.