WorldCity Business Magazine

Asia: On the edge

by Claudio Mendonca

As cargo arriving at the Miami Customs District jumps more than 10 percent, China positions itself to push out Brazil as the biggest source of South Florida imports.

South Florida’s geographic and cultural ties with Latin America, boosted by recent trade agreements, have powered longstanding North-South trade lanes. But U.S. Commerce Department figures for 2005 hint that an upset may be ahead: China is threatening to overtake Brazil’s hegemony as the top supplier of goods to the Miami Customs District.

The development comes in tandem with an overall 10.4% percent increase in South Florida imports, which totaled $31.8 billion during 2005, according to WorldCity’s analysis of Commerce Department data. Leading the import commodities were non-crude petroleum, aircraft, sweaters, men’s suits, T-shirts, cell phone components and computers.

China had carefully set the stage for its current rush to the top of the import roster for the Miami Customs District, which includes air and sea ports from Fort Pierce to Key West.

“China is not surprising me. In 1992, China imported $400 million and was the county’s No.13 partner,” says Manny Gonzalez, executive director of Miami-Dade County’s Jay Malina International Trade Consortium. “They jumped to No. 2 last year and are the largest customer of the Port of Miami. It has been incredible.”

Although Brazil continues to be the leading trade partner and the top single-country source of most of South Florida’s imports the Asian powerhouse made long strides last year, pushing the value of its shipments over the $3 billion mark.

Shipments from China in 2005 increased 31 percent to $3.1 billion, from $2.4 billion a year earlier. South Florida imports from Brazil, by comparison, suffered an 11 percent drop in 2005, to $3.4 billion. In 2004, South America’s biggest economy shipped $3.8 billion-worth of goods to the Miami Customs District.

“There have been a series of factors but exchange rate has definitely had a strong influence,” says Luiz Felipe Mendona Filho, Brazil’s deputy consul general in Miami. He said Brazilian exporters last year faced an unfavorable exchange rate compared to previous years.

Aircraft is the single-most valuable import product from Brazil. Shipments of Brazilian aircraft principally from Brazilian jet-maker Embraer took a 27 percent plunge, falling to $1.7 million in 2005 from $2.3 million in 2004. Mendona Filho said Brazil faces fierce competition from Canada, which enjoys benefits under the North America Free Trade Agreement. At the same time, Canadian jet-maker Bombardier has seen a strong year with growth global revenues reaching $15.8 billion for fiscal year 2005, up from $15.5 billion.

Canadian aircraft and aircraft part shipments to South Florida rose a dramatic 57 percent, to end 2005 at $49 million. Aircraft imports from France, the home of Airbus, also increased. They rose 55 percent in 2005 to total $207.9 million.

Other key imports from Brazil last year included cell phone components, shoes, wood, non-crude oil, ceramic tiles, automobile parts and coffee. From China, Miami is importing computers and computer parts, cell phone components, apparel, toys and furniture.

“City Furniture has a 1-million-square-foot warehouse in Sunrise, and 90 percent of the products are from China. The rest comes from Brazil,” says Carlos Buqueras, the director of business development at Port Everglades. Imports of furniture climbed to 15% in the region.

Farther down the import roster, the Dominican Republic held the No. 3 spot after China, but it was a distant third in 2005 and Honduras was close on its heels. With slightly more than $1.9 million-worth of goods principally textiles flowing through South Florida, the Dominican Republic saw a 2 percent drop in the value of its shipments, while Honduras posted a 6 percent increase, ending the year at $1.85 billion.

Venezuela, which has become Miami’s second-most important trade partner when both imports and exports are measured, saw its shipments to South Florida surge by 47 percent. Exports from the Netherlands also rose dramatically, by 125 percent. Both countries sell and distribute non-crude oil products through Port Everglades.

The large volume of Netherlands’ trade reflects its role as a principal European transit port, rather than the country’s actual standing as an exporter. The overall volume of cargo passing through Rotterdam rose 5 percent in 2005.

The biggest percentage jump in South Florida imports, however, stems from Belarus, the eastern European nation bordering Lithuania and Russia. Belarus, an energy exporter, is also developing an iron industry.

Product placement

When tracking the commodities entering the Miami Customs District, energy products and apparel articles led the pack. Non-crude oil imports mostly gasoline and jet fuel reached $3.3 billion, a 105 percent hike from 2004. Apparel imports, spread among three clothing categories sweaters, men’s suits and T-shirts totaled nearly $7 billion.

According to Buqueras at Port Everglades, some 125 million barrels of oil go through the Fort Lauderdale port annually. However, he noted, foreign-source petroleum accounts for only 15 percent of the total, mostly originating in Aruba, Mexico and Venezuela.

“Main commodities coming to our region are auto parts, wines and spirits and apparel that goes out to Central America and the Caribbean and comes back in,” says Buqueras, adding that Fort Lauderdale is also an import point for fruits and vegetables, principally from the Caribbean. “Most bananas consumers purchase at Publix Supermarkets come through Port Everglades,” he adds.

One agricultural commodity posted a whopping 54 percent jump last year as coffee imports from Colombia, Guatemala and Brazil skyrocketed. South Florida imports of Colombian coffee rose 178 percent to $39.2 million, while Guatemalan coffee shipments jumped 133 percent to $$30.3 million and those from Brazil doubled to $27.3 million.

In terms of manufactured imports, computers combined with hardware accessories accounted for $1.1 billion worth of imported goods while transmission devices for cell phones imports climbed 29 percent to total $1 billion. On their own, computer shipments from abroad were up 25 percentto $680 million.

Other commodities on the rise during 2005 included: artworks, which skyrocketed in 98% to reach $287 million; seafood, up 72 percent to total $216 million behind increased shipments from Asia; and antibiotics the vast majority imported Germany which rose 150 percent to value $90 million.