26/09/2014 |
The country’s imports dropped 20 percent in August compared to the same month last year and totalled US$5.7 billion, the largest decrease so far this year...
Meanwhile, exports dropped 12 percent and totalled US$6.5 billion.
Yet despite the decline, it was not enough to put a dent in the trade balance that saw the surplus soar 145 percent in August compared to the same month the year earlier to US$899 million.
So far this year, the trade balance has accumulated a US$5.3-billion surplus, a figure eight percent lower than the same period last year. A trade surplus of US$7.594 billion is expected this year, according to the recent amendment to the 2014 Budget.
“It was one of the largest drops I can recall. Not only because of the government’s restrictions and the worldwide drop in trade, but also because of the Central Bank’s new rules,” Miguel Ponce, the general manager of the CIRA imports chamber, told the Herald. “We were already anticipating a difficult year but apparently it’s going to be harder than expected. The main drop was in cars but several sectors were affected.”
Amid a shortage of dollars and decreasing foreign-currency reserves, the government has increased the controls on the purchase of foreign currency on the wholesale market by requiring all purchases in excess of US$150,000 to be reported in advance, instead of the US$300,000 previously in force. Importers insist that reporting the transaction is like a virtual request for permission for exchanging currency.
A 60 percent drop on vehicle imports was registered in August, leading to a cumulative 43 percent decrease for the year. This coincides with the lower sales figures for used and new vehicles in the domestic market. Negative figures were also reported for imports of fuel and lubricant (31 percent drop), accessories for capital goods (29 percent) and intermediate goods (four percent).
Diesel from Russia and the United States, liquefied gas from Qatar and Trinidad and Tobago and vehicles from Brazil and Mexico were the products that registered the largest drops. Meanwhile, more imports of US generators and trains from China were reported last month.
“The trade figures are related to the lower economic growth and the continuity of the import-substitution scheme. There’s a more important role of the domestic industry as supplier for the domestic market,” UBA economist Mariano Kestelboim told the Herald. “All of the countries in the region no longer have a surplus and now register a deficit. Argentina and Venezuela are the exceptions.”
The 12 percent drop in exports is due to a decrease in most of the sectors, including primary products (six percent), agricultural manufactured goods (13 percent), industrial manufactured goods (13 percent) and fuels and energy (21 percent).
Up to 70 percent of the drop on exports is due to lower sales of soybean oil (31 percent), soybean flour (19 percent), soybean fats and oils (26 percent) and road transport materials (13 percent). This was compensated with positive figures on cereals (12 percent), meat (20 percent) and fish (16 percent).
“When exports drop, imports decrease much more so the country has a higher surplus than the year earlier. It’s a game the government has been playing for the last few months,” Lorenzo Sigaut Gravina, chief economist of Ecolatina agency, told the Herald. “Now there’s a shortage of dollars due to the default so the government restricts imports. The drop will continue over the next few months and the US$7.5-billion surplus goal will be achieved.”
Mercosur, the main market
The Mercosur bloc continues to be the country’s main market, accounting for 26 percent of the exports sent to countries that are part of the bloc and 22 percent of Argentina’s imports. A trade surplus of US$2.6 billion was seen so far this year, while a US$457-million surplus was registered in August.
Imports from Mercosur dropped 23 percent in the first eight months of the year and 39 percent in August due to fewer purchases in all areas. Meanwhile, exports dropped 12 percent so far this year and registered low growth in August due to fewer sales of primary products, including grain, fuel, energy and industrial manufactures.
A trade surplus of US$3 million was reported last month with the ASEAN bloc, the second-most important trade partner for Argentina. Nevertheless, a deficit of US$390 million has been recorded so far this year. Imports from the bloc dropped seven percent in August due to fewer purchases of accessories of capital goods, vehicles and consumption goods, while exports decreased 28 percent because of fewer sales of primary products, agricultural manufactured goods and industrial manufactured goods.
The main destinations of the country’s exports in the first eight months of the year were Brazil, China, the United States, Chile and Algeria, while most of the country’s purchases came from Brazil, China, United States, Germany and Trinidad and Tobago.
Source:
Buenos Aires Herald
