India is now Colombia’s second largest export destination, after an oil-led boom saw January’s export figures quadruple as compared to last year’s total, according to Colombian statistics authorities (DANE).
The two countries have shared a trade agreement since 1970, but exports to India have shown a marked increase since 2009, when the South Asian nation of 1.2 billion people began to purchase Colombian oil in earnest. Of the $2.99 billion in total Colombian exports to India last year, $2.85 billion were mineral oils.
MORE: Colombia increasingly attractive to Indian business
“In 2008, exports from Colombia to India were about $16 million,” said Andrés Ortiz, commerce spokesperson at the Indian Embassy in Bogota, in an interview with Colombia Reports Monday.
At the time, exports were comprised mainly of pearl and wood products, but in 2009, the total value of Colombian trade to India surged to $449 million, $436 million of which was oil, said the official.
Presently, 95.41% of exports to India are oil-based, according to the Indian Embassy.
Only 7 years of oil reserves in Colombia
As Colombia’s Mining Minister Amylkar Acosta explained to the El Espectador newspaper last year, the prominence of natural resource exportation in the Colombian economy poses a looming problem, in that no new major reserves have been discovered recently. Though production has increased in recent years, Colombia’s long-term energy supplies are “extremely precarious,” he said.
MORE: 7 years of oil reserves no ‘doomsday scenario’ for Colombia: Analyst
According to the World Factbook, Colombia’s proved oil reserves as of January 1 2013 were 2.417 billion barrels.
Average Colombian production was estimated at 944,000 barrels a day for 2012, or 344 million barrels a year.
At this rate, barring a large new discovery, reserves will be exhausted in about seven years.
Serious Consequences
The effect on the balance of trade, should Colombia become a net importer, could be dramatic as roughly half of Colombia’s export income comes from oil and its byproducts.
Between January and July of 2013, Colombian exports amounted to $33.9 billion, according to the latest figures from the Colombian Ministry of Commerce, Industry and Tourism. Of this, $15.7 billion, or 46.3% of total export dollars, was from petroleum alone.
Growth of Colombia’s main export markets
Sources
- Interview with Andrés Ortiz (Colombia Reports)
- India, segundo socio comercial de Colombia (Portafolio)
- Principales destinos de las exportaciones Colombianas (DANE)
- Proved Oil Reserves (World Factbook)
