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Miami-Venezuela Annual Report:Win-win with No. 2 trade partner Venezuela

July 27th, 2006

South Florida exporters can barely keep up with shipments to Venezuela, where demand for consumer goods and construction equipment is growing at a fast clip. On the import side, Venezuelan shipments of gasoline are also on the rise.

In 2005, South Florida exported $3.1 billion in goods to Venezuela, up from $2.3 billion a year earlier. At the same time, the Miami Customs District imported $1.2 billion-worth of commodities mostly energy products from the oil-rich nation. Those imports reflected a 47 percent jump when compared with 2004.

The 32 percent increase in Venezuela-bound shipments from the Miami Customs District helped turn the South American country into South Florida’s second-most important trade partner. In 2004, Venezuela ranked sixth among top traders, behind the Dominican Republic, Colombia, Costa Rica and Honduras.

Venezuela’s shopping spree comes on the back of a buoyant economy. Despite high inflation and an unemployment rate of 12 percent, the South American country’s GDP expanded nearly 8 percent in 2005, following on the heels of 17 percent growth in 2004. The International Monetary Fund estimates that Venezuela’s GDP will grow another 4.5 percent in 2006.

That protracted expansion and greater access to credit have left Venezuelan consumers willing to loosen their purse strings and that showed in 2005 trade results. In tandem the government has embarked on a number of infrastructure projects stretching from Caracas to Maracaibo. They include dams, highways and high-rise buildings and have hiked demand of construction materials, tractors and equipment. Construction equipment exports soared 337 percent in value to reach $34.5 million in 2005.

In Miami, Venezuela’s consul, Antonio Hernandez Borgo, said there are tremendous export opportunities for South Florida contractors, especially in construction of low-income homes.

But South Florida exporters of electronic items were the ones that most benefited from the flurry of trade with oil-rich Venezuela. Transmission devices for cell phones topped the export list, rising nearly 36 percent to end the year worth more than $360 million. Computer parts for Venezuela held the second spot on the export list, with South Florida increasing those shipments by 50 percent to nearly $236 million. Sales of computer rose even more, jumping 52.5 percent to reach $211 million.

Aircraft parts were also important exports. In 2005, the Miami Customs District shipped more than $97 million-worth of plane parts, compared to just more than $95 million in 2004. Exports of regional jet parts, meanwhile, jumped nearly 44 percent to surpass $52 million last year. That was offset, however, by a decline in exports of parts for large aircraft. They decreased 23 percent to fall below $50 million.

Venezuela has four major air carriers: Aeropostal, Aserca, Santa Barbara and Conviasa, a state run airline founded in 2004.

Florida is also exporting train cars for Caracas’ extension of its subway, which currently carries 1.2 million passengers daily, as well as construction of additional subway systems in the cities of Valencia and Maracaibo. At the same time, Venezuelan’s national railroad agency, IAFE, is developing an intercity train network linking Caracas with two cities about 25 miles south of the capital. When finished, the train will be able to transport 80,000 passengers a day.

In 2005, South Florida shipped more than $29 million worth of axles, wheels and parts for rail vehicles. That’s more than a 122 percent leap from the $13 million-worth exported in 2004.

While South Florida was shipping consumer goods to Venezuela, the South American country was sending refined oil products to Fort Lauderdale’s Port Everglades. Imports of gasoline and other refined products almost doubled, rising to $971.5 million last year.

Live crustaceans, including shrimp, crab and lobster, were the second most valuable import from Venezuela. Although they valued more than $53 million, that reflected a 15 percent drop from the year before. Miami also bought more than $14 million-worth of frozen seafood, down 30 percent from a year before.

At the Venezuelan consulate, Borgo said his government wants to diversify its export base. That effort includes recuperating fisheries in Lake Maracaibo, where shrimp and crab are bountiful. Cuban experts are also giving the country advice on how to boost production of its traditional agricultural crops: sugar, coffee and cacao.