China sales to Latin America slow Good news for U.S.

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Mexico, the largest Latin American importers of Chinese goods with US$46 billion in 2010, has seen purchase growth rates diminish, from 20.5% year-on-year in the first half of 2011, to 18.5% in the third quarter, to 13% in August, according to data compiled by BBVA.

Brazil followed a similar path, with growth rates contracting from 37% in the first half of this year to 26% in the third quarter.

A Guangzhou-based businesswoman saw a decline in her trade from China this year. "We see a 20% reduction," Angélica Villegas Botero, Managing Director of Investment Logistics Company, told CNN.

Villegas compared her usual 150 containers a year, with an estimated 130 for 2011.

Her core business is exporting shoes and apparel from Asia, mainly China, to her native Colombia. She also has operations throughout Latin America, from Mexico to Argentina.

A Latin American shipper is seeing a similar drop. "We usually expect increased Christmas shipments around mid-July," Sebastián Santa Cruz, Director of the Chilean shipping company CCNI-Agunsa in Hong Kong, said.

While containers cross the Pacific from Chile laden with copper to meet burgeoning Chinese demand, they will more likely return empty when once had textiles, footwear and consumer electronics.

But this year's peak shipping season from Asia to Latin America was only an unfulfilled promise. "We've seen our business decline," Santa Cruz said.

Over half of CCNI-Agunsa's business is shipping copper from the world's largest exporter, Chile, to China. While the reference price for this metal slid around 20% since the beginning of the year, the shipper still sees growth.

Why? It appears Latin America is re-aiming north.

"I believe that the ups and downs in the economy, like the European debt crisis and weak demand in the U.S. have hit investors, importers," Santa Cruz told CNN. "They are taking less risk, not increasing inventories [in Latin America] and just-in-time supplies become more relevant."

Villegas agreed. Many of her clients preferred to pay for small air shipments delivered in a few days only, instead of going through the months-long process of procuring, shipping and processing full container loads from China.

When purchases have to be fast and low-risk, closer suppliers become more relevant.

Villegas said the U.S., Brazil and Mexico are stepping in to supply Latin American retailers during this slowdown in purchases from China.

So this year's Christmas gifts in the region may, after a long break, be made in the U.S. again.

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