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For the first time after 20 months, Argentina once again has a trade surplus

October 24, 2018 - By Catherine Smith

After 20 consecutive months of deficits, in September, due to the sharp drop in imports due to the rise in the dollar and the recession, the trade balance showed a trade surplus of US $ 314 million. This result was achieved even though exports declined, mainly due to the drought that affected the external sales of primary products.

The data are from the Indec and indicate that in the first nine months the deficit of the trade balance added US $ 6,453 million, 26.5% higher than the “red” of US $ 5,102 million of the same months of 2017.

Last month, export prices rose 7.3% and quantities fell 11.2%. Exports of primary products decreased 32.3% year-on-year, basically due to the collapse of the quantities sold abroad as a result of the drought. On the other hand, exports of manufactures of agricultural origin (MOA) increased by 1.2%; those of manufactures of industrial origin (MOI) decreased 4% and exports of fuels and energy increased 122.2%.

Meanwhile, the prices of imports rose 9.9% but the quantities contracted 28.3%. Purchases of capital goods from abroad fell by 42.3%, intermediate goods by 0.3%; those of fuels and lubricants increased 23.3%; those of parts and accessories for capital goods fell 23.8%; those of consumer goods fell 27.5% and those of passenger motor vehicles fell 50.2%.

These data reflect the drop in consumption while in the case of capital goods and their accessories anticipate a strong decrease in investment.

For this reason, the consultancy LCG notes that “despite the improvement in the result, the dynamics were not entirely virtuous given that it was the product of a drop in imports (21.2% year-on-year), but also of exports ( 4.8% year-on-year.) The improvement is explained less by the effects of the improvement in competitiveness and more, at least for now, by the effects of lower activity “.

The Indec clarified that on the side of exports “negatively impacted on the trade balance of September, net exports (exports minus imports) of the four main products derived from the cultivation of soybean: crude soya oil, biodiesel and their mixtures, flour and pellets from the extraction of soybean oil, and soybeans, excluded for sowing. “

He also played “against” that the prices of imports increased 9.9%, above 7.3% of exports. That is why the Indec points out that “if the prices of the same month of the previous year had prevailed, the commercial balance would have yielded a surplus of 402 million dollars.” Under this assumption, the country had a loss in terms of the exchange of 116 million dollars. Dollars”.

The Ecolatina consultancy estimates that “the year would end with a trade deficit of goods around US $ 5,500 million, which would imply a significant improvement compared to 2017, when red reached US $ 8,309 million, especially if we consider the deterioration in the terms of trade (which accumulates 2.5% so far this year) and the meager agricultural crop, but the improvement will come from “negative reasons” such as falling demand and not “positive reasons”; an increase in exports. “

In the same line, LCG concludes that “for the next few months we expect a dynamic similar to that of September, the commercial balance will be more favorable, although it will be far from reversing the cumulative balance to September of US $ 6,453 million. to the recessive effect that to a virtuous scenario of rise of exports “.

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