Argentina: Trade with Brazil increased by 41% in May, reaching highest figure since 2013

RIO DE JANEIRO, BRAZIL – The trade flow between Argentina and Brazil registered a 41% year-on-year increase in May, reaching US$2.7 billion in the month, the highest figure since 2013 and pushed by the rise in product prices.

Exports totaled US$1.2 billion in May, up 51% year-on-year, while imports grew 34%, amounting to US$1.5 billion, which marked a difference compared to previous months, when imports beat exports, according to a report by consultancy Abeceb.

Thus, May closed with a deficit of US$244 million, a figure lower than the US$288 million recorded in May 2021.

EXPORTS

As for exports, after a meager 4% increase in March and 25% in April, the good 51% growth figure of May was driven by “Wheat and rye, unmilled” (+32%); “Passenger vehicles” (+34% y.a.), in line with the good performance of the local automotive sector -exports, as well as production, increased 27% during the first five months-; “Medicines and pharmaceutical products, other than veterinary”; “Preparations and cereals, of flour or starch of fruits or vegetables” (+211% y.a.).

Exports of “Motor vehicles for the transport of goods and special purposes” -the third most important item, with almost 13% of total exports- fell 8% y.y., mainly due to the decrease in the shipment of pickups.

The five categories accounted for more than 50% of total sales, with vehicles and wheat accounting for 41%.

IMPORTS

Regarding imports, among the products with the highest share in the total, the increases are in “Fuels of petroleum or bituminous minerals (except crude oil)”; “Soybeans” (+253%); “Parts and accessories for motor vehicles” (+29% y.a.); inputs necessary for the domestic production of vehicles, which is on the rise and has already accumulated an increase of 27% during the first five months of the year; and “Iron ore and its concentrates” (+20% y.a.).

These four categories accounted for almost 25% of imports.

Finally, imports of “Passenger vehicles” -the second-largest item, representing 9% of total purchases- decreased 9% y.a., reflecting the restrictions on foreign trade.

In the first five months of the year, imports accumulated US$5.9 billion (+28% vs. the same period of 2021), while exports reached US$4.8 billion (+13% vs. Jan-May 2021).

FAVORABLE BALANCE

Thus, the accumulated bilateral balance between January and May was negative by US$1.1 billion, practically tripling the deficit of the same period of 2021 (US$341 million).

From now on, and beyond the May data, the widening trend of the deficit trade balance with Brazil will be expected to consolidate.

With imports growing above exports, the trade deficit could close 2022 at around US$2.5/2.7 billion, below the average of US$3.7 billion verified between 2010 and 2017 before the 2018-2019 crises in Argentina and the pandemic.

With information from Ámbito