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Gold on the throne of exports for the second time. How long will his reign come?

01 December 2020

 

two catastrophic natural phenomena (Eta and Iota) and the socio-political crisis that began in April 2018, Nicaragua's exports “shine”, because this year gold has become the main product sold abroad.

 

Gold, used in various industries in the world, has the characteristic of being one of the main investment assets in times of global crisis and the one that has been experienced this year by the Covid-19 pandemic has caused a significant increase in its price, according to international analysts.Cetrex data indicates that the price of this product increased $ 10,798.7 per kilogram exported, between January and October 2020, compared to the same period in 2019.This increase, plus the increase in volumes sold, caused the value of precious metal exports to increase 36.6 percent in that period.The foreign trade statistics of the Central Bank of Nicaragua refer that gold exports have generated around 51 million dollars on average monthly, between January and August of this year; meat, 44 million and coffee, 50 million. Therefore, the competition is tilted this year towards the gold metal.

 

But the increase in gold exports boosted this global growth in foreign exchange generated in merchandise exports.

 

To put it in perspective, in the first 10 months of the year, gold registered an increase of 145 million dollars, with respect to the currencies that it generated in the same period of time in 2019. Meanwhile, among all the products exported from the country they only generated an extra $ 198.5 million. In other words, gold is responsible for 73 percent of the extra currencies that the country's exports have generated until October 2020.

 

Fall in mining activity

On the other hand, despite the good moment reflected in gold exports, mining activity has experienced a decrease in recent months, according to the Monthly Index of Economic Activity (IMAE) for September of the Central Bank of Nicaragua."The exploitation of mines and quarries registered growth of -10.6 percent (-5.6% in the accumulated January-September), as a result of the lower extraction of gold, sand, quarry stone, select material and tuff, mainly", summarized the report.

 

According to the BCN, mining activity, which includes metallic and non-metallic mining, has had a negative six months and a positive three. The most affected months would be April, May and June, with falls of 17.3, 54.8 and 14.5 percent, respectively. That period coincides with the one with the greatest impact of the Covid-19 pandemic.Furthermore, according to the same entity, gold production registered falls of 18.3, 57.1 and 15.3 percent in those same months.

 

Source: https://www.laprensa.com.ni/2020/11/30/economia/2753969-oro-en-el-trono-de-las-exportaciones-por-segunda-vez-hasta-cuando-llegara-su-reinado