Virus could test Latin America's already ailing economy

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In this photo taken March 6, 2020, Dionisio Romero, owner of a dragon fruit farm checks that the plants are free of some pests at his estate La Voluntad de Dios in El Progreso, Ecuador. As the coronavirus wreaks economic havoc worldwide, the farmer has watched demand for his fruit plummet and prices drop to astonishing lows, wiping away much of the profit he might normally expect. (AP Photo/Marcos Pin)

PROGRESO – For years, Dionisio Romero has relied for his livelihood on a magenta-colored dragon fruit that is wildly popular in Asia, planting dozens of the spindly trees at his farm near Ecuador’s Pacific coast.

But as the coronavirus wreaks economic havoc worldwide, the 72-year-old farmer has watched demand for his fruit plummet and prices drop to astonishing lows, wiping away much of the profit he might normally expect.

“It’s affecting all of the production of pitahaya in Ecuador,” he said on a recent morning from his farm, called Voluntad de Dios, or Will of God. “You don’t want your fruit to grow rotten on the tree so you sell it for whatever price you can.”

The virus and its wide-ranging effects on business have Latin America bracing for a downturn that could test the resilience of the beleaguered region’s already ailing economy.

China, where the virus emerged, has been making inroads into Latin America over the last two decades. It is now the region’s second-largest trading partner, meaning any economic contraction there will have a ripple effect. Demand for products like Chilean salmon and Argentinian beef have dipped. The prices of all-important commodities like copper and oil have also declined.

Countries such as Chile, Peru and Mexico, with export-driven economies, are likely to see the most serious impact, while others like Brazil and Argentina, whose markets are more closed, could be somewhat shielded from the fallout.

“This is a cataclysm for our economy,” said Manuel Viera, president of the Camera Minera de Chile, an independent association representing mining interests. “We should have been thinking about the lean years when the price of copper was up.”

Trade between China and Latin America soared to $306 billion in 2018, up from just $12 billion at the start of the century. Exports to China now represent nearly 10% of all goods produced and sent for sale abroad.