Ecuador’s exports to Venezuela fell by more than half in 2013 to $464 million as political and economic turmoil in Venezuela and a crackdown at home on the fraudulent use of a virtual currency took their toll.
Having benefited in the past from weak production in Venezuela, a niche market where it has become necessary to import just about everything, Ecuadorean exporters say Venezuela has become a headache for them as they suffer losses from harsh currency controls and cumbersome paperwork there.
Companies in Ecuador now say that some of their exports are being returned because Venezuelan importers have been unable to obtain U.S. dollars to make payments. Since a banking crisis in 2000, Ecuador has used the U.S. dollar as its currency, while Venezuela tightly limits access to dollars amid a sluggish economy and hyperinflation.
Ecuadorean exports to Venezuela include a broad array of products such as vehicles, tires, appliances, tuna, diapers, medicine, cleaning products, and agricultural and dairy products.
Pacem has 12,000 metric tons of palm oil sitting at Ecuador’s Esmeraldas port, awaiting shipment to Venezuela. The company says it has been unable to send the product because its Venezuelan partners have faced difficulty obtaining permits and dollars for payment.
“Having merchandise held up at the port is a very complicated situation that involves many financial costs, the risk of a fall in the product’s price and even the risk of deterioration” of the product, said a Pacem executive, who asked not to be named.