Trade and maritime transport between Africa and South America

Summary Trade between Africa and South America is of relatively minor importance for each region. The main purpose of this report is to determine if a scarcity of maritime transport services could explain this comparative unimportance. More than half of all trade between the two regions is accounted for by just ten specific bilateral flows in petroleum, grain, iron ore, coal, and sugar. Almost all inter-regional trade moves by sea, mostly by non-liner charter shipping services. Trade between Africa and South America is subject to relatively low freight rates, mainly due to the type of products traded, which are of a bulk nature rather than manufactured goods. Trade patterns are the main determinant of the supply of transport services, and there is little trade between Africa and South America for historical reasons, the lack of preferential trade agreements between the two regions, and because their economies do not necessarily complement each other. Wherever there is a demand for transport, be it for Argentinean grain in Egypt, for cotton from Benin in Brazil, for iron ore from Brazil in South Africa, or for petroleum from Nigeria in Chile, no fundamental shortage of supply of shipping services can be identified. There appears to exist a potential to generally reduce international transport costs in Africa and South America by port modernization.