November 24, 2017

Decreased imports and exports

Wednesday, April 2, 2014

Argentina trade with Brazil drops 16 percent

Argentina registered a 16 percent drop in its trade with Brazil in March compared to the same month last year as a consequence of decreasing exports and imports, accumulating so far this year a 17 percent drop, according to a report by economic consultancy Abeceb, which relied on figures from Brazil’s Development Ministry.

The country registered last month US$1.218 billion worth of exports sent to Brazil, a 16.8 percent drop compared to the same month last year. So far this year, goods valued at US$3.921 billion have been exported, which represents a 21 percent drop. Lower exports were registered mainly for natural gas, wheat, vehicles, auto parts and medicine.

Argentina is Brazil’s third-largest supplier after the United States and China. The country’s exports represented seven percent of the total goods imported by Brazil in March.

On the other hand, imports of Brazilian goods reached US$1.183 billion in March, 15.3 percent less than the same month last year. Fewer purchases of agricultural machinery, tractors, vehicles engines, auto parts, vehicles and tyres were reported. Argentina was Brazil’s third most important buyer in March, again after the United States and China. The country’s purchases represented 6.7 percent of Brazil’s total sales.

“This trend can be explained due to the less flexible Argentine trade policies in the first three months of the year,” Abeceb reported.

“The shortages on the foreign exchange market forced the authorities to limit even more overseas purchases, especially in sectors structurally deficient such as carmakers.”

The latest bilateral data came as Brazil posted a trade surplus of US$112 million in March, recovering after two straight monthly deficits but still well below historical levels. Brazil’s trade balance has been hit hard by rising fuel imports and a drop in the price of iron ore and some other key exports.

The surplus was in line with market expectations of US$100 million. The country posted a deficit of US$2.13 billion in February.

Brazil posted a surplus of US$162.6 million in March, 2013, but from 2002 till 2012 its trade surplus averaged US$2 billion for that month.

The shrinking trade surplus is eroding Brazil’s external balance, raising the current account gap to 3.69 percent of GDP in February from 2.82 percent in February, 2013. Last year’s current account deficit was the biggest since 2001.

A worsening trade balance is a serious challenge for Brazil. The country is struggling with weaker demand for its exports due to a still subdued global economy, and low productivity among Brazilian manufacturers has made their products less competitive against those of foreign rivals.

While the real slid more than 13 percent against the dollar last year, the weaker currency has done little to significantly bolster exports. The weaker real has raised the prices of imports but Brazilians continue to snap them up at a rapid pace.

Herald with Reuters

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