International Trade

Trade through the Miami Customs District expected to fall in 2013 for the first time since 2009

 

mwhitefield@MiamiHerald.com

Trade through the Miami Customs District, which has been on a growth spurt in recent years, is expected to fall in 2013, due mostly to a dip in gold prices and a fall-off in commerce with politically volatile Venezuela.

A record-breaking $124.73 billion worth of cargo moved through the Miami district, which includes airports and seaports from Palm Beach to Key West, last year. But in the first nine months of 2013, trade handled by the Miami district totaled $100.26 billion, compared to $102.49 billion in the first nine months of 2012, according to an analysis of U.S. Census data by WorldCity, a Coral Gables data research and media company.

That’s a 2.18 percent decline, and unless there’s an unexpected surge in trade during the fourth quarter, the Miami district is expected to record its first drop in trade since 2009 when the United States and most of the rest of the world were still in the throes of the recession, said Ken Roberts, president of WorldCity, during a Trade Connections event where the data was presented.

Through the first nine months of the year, Miami district exports declined by 6.7 percent to $56.67 billion, while imports increased by 4.4 percent to $43.59 billion.

In 2012, gold pumped up the Miami district numbers and the metal was both the region’s leading export and import. More gold, mostly from mines in Bolivia, Colombia, Mexico and Peru and the gold trading center of Curacao, arrived in Miami than any other U.S. customs district last year.

But in the first nine months of the year, gold imports were off by $124.7 million, or 2.11 percent, and gold exports were off by $2.46 billion, or more than 37 percent, according to the WorldCity analysis.

Gold and gold scrap leaves South Florida almost as quickly as it comes in with the most common destinations being Switzerland, the United Arab Emirates and the Dominican Republic.

Miami is not only home to one of the largest precious metal refineries in the United States but is also a center for bullion trading, assaying, logistics and financing of the gold trade.

As the price of gold shot up, reaching an all-time high of $1,900 a troy ounce in late August and September 2011, the relative importance of gold in the value of Miami district trade rose accordingly.

But since then, the price of gold has fallen to more earthly levels with gold trading Wednesday at around $1,257 on the spot market. Wednesday.

Dropping gold prices have in turn impacted trade with Switzerland so far this year. Total trade was down nearly 54 percent to $3.84 billion.

Other major Miami district trading partners that have seen declines in trade with South Florida this year are: Venezuela, Colombia, Chile, the Dominican Republic and Mexico.

Trade with Venezuela, which as recently as 2008 was the Miami district’s second most important trading partner, fell 13.7 percent in the first nine months of the year. It now ranks fifth with $4.74 billion in trade with the Miami district through October.

“Venezuela is a disaster, lost,’’ said Ayram Vázquez, senior Latin American economist for Oxford Economics. He blamed the difficult political environment under Venezuela’s leftist government for its economic problems.

Although lower commodity prices have taken a toll on a number of Latin American economies, Vázquez said he’s still bullish on Mexico, Colombia and Chile — as well as Peru, whose trade with the Miami district grew 46.4 percent through October.

Even though the Chilean economy has softened due to weaker demand for copper, “When we’re looking at Chile, we’re still looking at the little Switzerland of South America’’ in terms of stability and good longer-term prospects, Vázquez said.

In the future, he said, “we’ll see continued segregation in emerging markets with clear winners and losers.’’

Brazil, Florida’s top trading partner by a wide margin, is something of an anomaly. Despite an economic slowdown, its trade with South Florida increased by 2.95 percent during the first nine months of 2013 to $14.1 billion.

Many of the questions at the Trade Connections event centered on the impact on South Florida of the expansion of the Panama Canal. A third set of locks is being built to accommodate ships that carry as many as three times the cargo of vessels now crossing the isthmus.

PortMiami is currently dredging its shipping channel to a depth of 50-52 feet to accommodate the big ships and will be the only Florida port ready for the large post-Panamax ships when the canal expansion is completed in 2015.

Although other East Coast ports, including Port Everglades, are in various stages of trying to get permits to begin dredging, K.C. Conway, of Colliers International and author of ports analysis reports, questioned how many East Coast ports really need to be post-Panamax-ready.

“One of my major concerns is that on the East Coast, we’ll end up with an over-supply of post-Panamax-ready ports,’’ he said. “There’s not going to be a quadrupling of cargo.’’

Post-Panamax ships coming up the East Coast, he said, will only want to stop at three ports. Currently, he said, he’s betting on PortMiami, Charleston and Norfolk, Va., which can already handle post-Panamax ships.

Conway said he agreed with Florida Gov. Rick Scott’s decision to put $112 million of state money into Miami’s $220 million dredging project.

“It would have been a huge economic loss for the state not to have a post-Panamax-ready port,’’ he said. “It was a very important defensive measure.’’

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