Argentina’s exports to Brazil doubled in 12 months, hitting an 8-year record

RIO DE JANEIRO, BRAZIL – Exports to Brazil  from Argentina reached US$1.355 billion in November, according to official data from the Brazilian Special Secretariat of Foreign Trade and International Affairs (SECINT). The figure was the highest since October 2013 and up 99.6% over November 2020.

In annual terms, sharp increases were noted in shipments of corn, unmilled wheat and rye, and vehicles. These products accounted for nearly 45% of total exports to the region’s largest economy.

Argentina thus increased its share in Brazil’s total imports from an average of 5.2% in the last 12 months to 6.9% last month, according to a report by Abeceb consulting firm.

As for Argentine imports from Brazil, there was a significant deceleration compared to previous months. The year-on-year increase stood at only 11.5%, totaling US$1.047 billion. Particularly noteworthy was a 42.7% drop in passenger vehicle importation.

Abeceb stated that this was largely due to the Brazilian automotive sector’s production constraints due to the global shortage of chips, in addition to Argentina’s import restrictions.

Based on these figures, the bilateral trade surplus for Argentina reached US$307 million. Likewise, the trade exchange between the two countries grew for the 11th consecutive month and returned to 2018 levels.

However, in the year-to-date, with only one month left before the end of the year, the trade balance continues to be favorable for Brazil by approximately US$203 million, with exports to Argentina reaching US$10.714 billion (+50% year-on-year) and imports reaching US$10.917 billion (+42%).

Looking ahead, Abeceb projects that trade exchange will remain high in December but warns about potential issues for 2022. These are linked to:

• A potential rate hike by the U.S. Federal Reserve, which would impact the price of commodities and limit foreign currency inflows for both Brazil and Argentina.
• The risk of new health restrictions due to new variants of Covid-19, which could again distort trade flows.
• The chip shortage crisis, which does not seem to have a short-term solution.
• Slowdowns in economic activity in both countries, with stagnation already observed in Brazil.
• Political uncertainty in Brazil due to the upcoming elections.