It's really no secret that the United States is a country of importers. Sure, the U.S. is also the third largest exporter worldwide, but at the end of the day, when all is said and done, this is a nation of importers.
So what could a South American country that in 2010 was estimated to rank 56th worldwide in total exports by dollars possibly hold in common with the United States?
Firstly, Colombia is a free-trade partner with the U.S., meaning the majority of products imported from this South American country are duty-free. More importantly, Colombia's economy is strongly tied to the health of the U.S., with nearly one-third of the country's exports headed to the U.S.
But think about this in another perspective: How reliant is the United States on Colombia?
Before you answer that question and immediately dismiss Colombia as a minor player in a sea of trade giants, think about this in terms of the products Colombia exports to the U.S. -- namely coffee, bananas, and oil. Think about all of the cups of coffee you consume, the number of bananas you eat in a year, or the countless gallons of gas you put in your car. It probably adds up very quickly. Luckily for us, Colombia isn't the only country we import oil from, but it is one of the few where we import coffee and bananas.
Now you might be wondering, "So what, we import a few bananas and coffee beans -- big deal!" In actuality this is a very big deal. Over the past few months, Colombia has been experiencing an absolute torrent of storms, one after another. Flash flooding in the country has tragically cost hundreds of lives. It has also hampered banana and coffee production to the point where it could begin to have a drastic effect on the prices of these products in the United States. Rising prices have a ripple effect throughout the economy and with most food and energy costs heading steadily higher over the past few years, do we really need another impetus to raise them further?
Coffee is the primary import from Colombia, and large chain coffeehouses like Starbucks
Even distributors of bananas and other fruits may come under significant pricing pressure. Chiquita Brands
Colombia is actually a silent partner to the U.S. and is one of the many nations currently supporting our economic recovery. If Colombia continues to be hampered by the unfortunate flooding currently plaguing its country, it could have negative consequences on our economy and subsequently your wallet.
Am I overstating the obvious on Colombia or is there something I've missed in my analysis? Feel free to chime in with your thoughts in the comments section below and consider adding these stocks, as well as your own personalized list of companies to My Watchlist.