Argentina: Exports plunge in March, outlook for coming months improves amid record harvest
April 22, 2014
In March, exports plunged a hefty 15.9% over the same month last year. The contraction contrasted the 0.7% increase recorded in the same month last year and represented the fifth consecutive drop in exports. The reading was underpinned by a 59.0% drop in grain exports as farmers continued to hoard grains and soybeans to hedge against the weak peso.
A month-on-month comparison corroborates the dismal picture suggested by the annual figures. Exports contracted 9.5% on a seasonally-adjusted basis in March, which contrasted the 3.3% expansion recorded in February.
Imports dropped 4.1% annually in March (March 2013: +5.6% year-on-year). Amid the continued deterioration in exports, the trade surplus narrowed to USD 41 million, which was just a fraction of the USD 811 million recorded in March 2013. Moreover, this was slightly lower than the USD 44 billion surplus recorded in February. That said, the trade surplus may pick-up in the coming months: Argentina is expected to harvest a record 55 million tons of soybeans this year, which will boost grain exports. The country, which has no access to international capital markets since defaulting in 2001, depends heavily on commodity exports to draw the foreign exchange reserves required to fulfill its debt obligations.
LatinFocus Consensus Forecast panelists expect that exports will expand 1.6% in 2014, pushing them to USD 85.5 billion. For 2015, the panel expects exports to grow 2.8%.
Author: Armando Ciccarelli, Head of Data Solutions