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Last Updated:[18-01-2011 07:30:01 EDT] Zoom in Zoom out Back to Tradenews

Sucre Gets Functional with Ecuador-Venezuela Trade

tradenews The first shipment of crude palm oil from Ecuador to Venezuela has boosted a new trade currency regime in the Latin American region. Ecuador’s state-run National Development Bank (BNF) in its official website stated that as part of a bi-monthly export agreement between firms in both countries – the shipment has been sent on Dec 31 to Venezuela.

The Unified System of Reciprocal Compensation Payments (Sucre) was created by members of the Alternative for the Americas, or ALBA, which is a regional trade group founded in 2004 by Venezuela and Cuba. Current ALBA members include Bolivia, Cuba, Ecuador, Nicaragua, Saint Vincent and the Grenadines, and Venezuela.

The ALBA has ratified the Sucre to establish a regional currency as well as to minimize the reliance on the US dollar in business transactions. The currency is also understood to reduce transaction costs and exchange risks. Besides, comes with incentives to increase intra-regional trade, the productivity of member countries while strengthening the integration process of the region.

The BNF said Ecuador had sold Venezuela 5,000 metric tons of crude palm oil using the Sucre, the virtual currency. The transaction was executed via the countries’ central banks at a rate of $1.25 per Sucre, it added.

In regards to palm oil trade, the BNF stated the new currency regime corrected distortions that multinational companies had generated in the palm oil refining chain - “which traditionally has been exploited, and undervalued the work of Ecuadorian producers.”

The Ecuadorian company Dincodex SA was the exporter in partnership with several Ecuadorian industries, while the Venezuelan company Diana Industries was the importer.

By Jose Roy

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