Brazil, Argentina trade reverts into deficit in the year-to-date

Brazil’s trade balance with Argentina shifted from a surplus of just US$75.5 million in the first quarter to a deficit of US$40.3 million by April, according to data released by the Secretariat of Foreign Trade (Secex/Mdic) on May 08. This reversal marks the first deficit in bilateral trade since 2020 when the deficit was US$167.76 million.

The deficit stems from exports totaling US$3.91 billion and imports amounting to US$3.95 billion. José Augusto de Castro, president of the Brazilian Foreign Trade Association (AEB), noted that the shift is not unexpected. “It reflects a decline in domestic demand, with Argentinians reducing imports to bolster their trade balance and address foreign exchange constraints,” he explained. Castro anticipates that the trade deficit with Argentina will persist throughout the year, given the gradual recovery anticipated in the neighboring country.

The chart below delves into the maritime container trade between Argentina and Brazil (exports and imports) between Jan 2021 and Mar 2024. The data was derived from DataLiner.

Container Trade Brazil-Argentina | Jan 2021 – Mar 2024 | TEUs

Source: DataLiner (click here to request a demo)

Last year, an atypical surge in Brazilian grain exports to Argentina, driven by the failure of the Argentine soybean harvest, contributed to a surplus in the bilateral balance. However, Secex data for January to April this year reveals a 29.9% decline in Brazilian exports to Argentina compared to the same period last year, contrasting with the overall increase of 5.7% in Brazilian exports. Imports from Argentina remained relatively stable during this period, with a modest 2.9% increase.

Source: Valor Econômico

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