Looks like China is making more inroads in South America.
China has replaced Venezuela as Colombia's second-largest trading partner, as Colombia's oil exports to China have multiplied more than 50-fold over the last year.
Colombian exports of crude, fuels and derivatives to China totaled $235 million in the first 10 months of 2009, up from $4.5 million in the same period in 2008, according to data from Colombia's national statistics agency, or DANE, released Thursday.
"China is investing heavily in Latin America looking to get hold of commodities, which is likely to continue," said Bertrand Delgado, a New York-based research analyst for emerging markets and Latin America at RGE Monitor. "The problem is that Colombia's exports to Venezuela are mainly value-added, while exporting oil is just raw materials. When you try to advance as an economy you try to export as many value-added products as you can."
Colombia's exports to China were valued at $115 million in October, up from $15 million in October 2008. Most of the rise is due to increased exports of crude and oil derivatives, a DANE spokesperson said.
"This year we have shipped 6 cargoes of 1 million barrels [of heavy crude mixed with naphtha] each to China," said Mauricio Tellez, a spokesman for Colombia's state-controlled oil company Ecopetrol SA (ECOPETROL.BO).
Venezuela is traditionally Colombia's second-largest trading partner, after the U.S., but trade between the two neighbors slumped in the third quarter due a diplomatic dispute over the U.S. military presence in Colombia.
Colombian exports to Venezuela in October fell 70% to $195 million on October 2008, after Venezuelan President Hugo Chavez said his country will substitute Colombian imports with products from other countries.
Colombian President Alvaro Uribe Wednesday said Venezuela is currently enforcing an embargo against Colombia and other Latin American countries are taking advantage to substitute Colombian products on the Venezuelan market.