Supply chain crisis affects Latin America, with severe shortages of goods in many industries

According to foreign media reports, Latin America's retail industry and economy are suffering from the impact of the global supply chain crisis.

Although the problem is not as severe as in the United States, supply chain problems could plunge Latin America into crisis as the region relies heavily on imports. Manufacturers and logistics companies have been unable to cope with the rapid increase in demand for goods and services since governments in Latin America began to relax restrictions on economic activity and population movement .

In Colombia , there are shortages and rising prices of consumer goods such as toys, electronics and appliances , and the situation is expected to worsen during the holiday season .

"Shortages are causing product prices to rise, but the most important reason is the sharp increase in logistics costs, " said Javier Diaz, president of Colombia's National Foreign Trade Institute (Analdex). Normally, a container from China costs only $2,200 to transport, but now the cost is between $20,000 and $22,000.

Mexico's retail sector has also been hit by product shortages, with products that were in high demand during the pandemic , such as bicycles , out of stock . Mexico's central bank said prices in Mexico have risen by nearly 6% this year , twice the central bank's previous target.

In addition, the chip shortage has also hit the country's pillar industry , the automotive industry. Semiconductor chips are essential parts for automobiles . The lack of chips has forced auto factories to cut production and, to a certain extent, caused Mexico's GDP to fall by 0.2% in the third quarter compared with the previous three months. Experts believe that supply chain problems will continue until the end of next year.

Costs throughout the supply chain in Chile are also rising sharply, which in turn is triggering price increases, especially in areas with lower profit margins such as technology products, furniture, cars, stereos and microwave ovens.

In Argentina, wineries, electronics manufacturers, shoe manufacturers, agricultural machinery manufacturers and automobile manufacturers are facing a shortage of raw materials . The companies most affected are small and medium-sized enterprises . Reduced freight supply and rising transportation prices have further exacerbated Argentina's import problems.

Brazil is Latin America's largest economy and one of the world's largest food exporters . Container shortages and severe congestion at Asian ports are affecting Brazil because China is its largest fertilizer supplier . Supply chain issues could have an adverse impact on the 2021-2022 harvest.

Latin America

Supply Chain

retail