Bananas, coffee and palm oil: The trade of agricultural commodities in the framework of the EU-Colombia free trade agreement.

Julieth P Cubillos T,Béla Soltész,László Vasa,Arkadiusz Piwowar

doi:10.1371/journal.pone.0256242

Abstract

Generally, research and studies about commodities focus on price trends, analysis in terms of international competitiveness, market position structure, rate of net exports, market share, and concentration index. This paper has developed an analysis of the most influential agricultural commodities traded from Colombia to European Union, which are bananas, coffee, and palm oil. Analyzing the economic and commercial effects in two traditional agricultural commodities from Colombia (bananas and coffee) with the rise of palm oil as a commodity in the trade relation with its partner; the European Union. The structure draws from the overview of general aspects and the behavior of Colombian foreign trade, as diversification of export products and trade partners, to focus on the characteristics of the trade relationship between the European Union and Colombia. The aim is analyze the proportional relation between bananas, coffee, and palm oil exported to the EU, according to three indicators, the volume of production, exports share, and trade value, from 2008 until 2019, identifying the trends before and after the implementation of the free trade agreement. Finally, with the coefficient correlation, determine the agricultural commodity that has the strongest and positive relationship with the total agricultural exports value from Colombia to the European Union.

Highlights

All along its history, Colombia has been specialized in the primary sector in international trade, based on primary goods, exports of natural resources, and raw materials without value added
The analysis of this paper focuses on the three main agricultural commodities exported from Colombia to the European Union which are bananas, coffee, and palm oil, and assesses the hypothesis posed: ‘rise of palm oil export trade from Colombia to the European Union has reduced the participation and value trade of Colombian traditional agricultural commodities “(bananas and coffee)”
Against the perception that the main agricultural export product of Colombia is coffee, it is appreciated that bananas have been the most important export agricultural commodity with the European Union (EU) over the recent period, with a large difference in production and export value over other commodities

Summary

Introduction

Colombia has been specialized in the primary sector in international trade, based on primary goods, exports of natural resources, and raw materials without value added. Once predominantly a coffee-based economy, between 1930 and 1989, the coffee share was around 60.2% in total national exports, and other agricultural commodities (bananas, flowers, meat, sugar, and tobacco) were 5.9%, the mining sector and oil had a share of 11.5%, and the manufacturing sector was 22.3%, according to [1]. Colombian export performance began to change in the composition of the commodities traded. By 2000, coffee accounted for only 8.43% of foreign exchange earnings, while oil and mining products jumped to 35.34%.

Methods

Results

Conclusion