Exports to Argentina at the lowest share since 1997

In the first two months of this year, exports from Brazil to Argentina saw a 28% decline, totaling just over US$ 1.705 billion. Consequently, the country’s share in Brazil’s total exports plummeted to just 3.4%, marking the lowest percentage in the data series that began in 1997. Although at a slower pace, imports of Argentine products also fell during this period, with a 14.3% decrease amounting to US$ 1.519 billion.

The trade flow (sum of exports and imports) decreased by 22.0% to US$ 3.212 billion, resulting in a bilateral exchange that yielded a $192 million surplus for Brazil in the first two months of the year. Throughout 2023, Brazil enjoyed a surplus of $4.715 billion. These figures come from the Secretariat of Foreign Trade (Secex) under the Ministry of Development, Industry, Trade, and Services (MDIC).

Data from just two months do not necessarily provide an accurate representation of the year’s overall trade outlook. However, both MDIC technicians and experts in foreign trade view the numbers concerning trade with Argentina with apprehension.

This apprehension stems from the fact that while Brazil’s trade balance saw the first two months end with record exports and surpluses, exports to Argentina experienced a sharp decline, with no immediate prospects of reversing these figures in the short term.

The chart below compares container exports from Brazil to Argentina to imports in the Spanish-speaking country between Jan 2022 and Jan 2024. The data is from DataLiner.

Container Exports and Imports | Argentina x Brazil | Jan 2022 – Jan 2024 | TEUs

Source: DataLiner (click here to request a demo)

Soybeans see largest drop in bilateral trade

Individually, soybeans were the main driver behind the contraction in exports to Argentina. In 2023, soybean shipments skyrocketed, rising by 1.02k% (or $1.85 billion compared to the previous year), with soybeans accounting for 12% of total sales to Argentina.

The increase was prompted by a hydrological crisis that hit the country, significantly reducing soybean harvests, Argentina’s flagship export, and forcing the country to import the product to honor international commitments, particularly those linked to soybean meal and oil.

In the first two months of this year, Brazilian soybean imports totaled a little over $4.2 million (a 97% decrease from the $120 million imported in the same period last year). With this reduction, soybeans accounted for only 0.25% of total sales to Argentina.

According to the president of the Brazilian Foreign Trade Association (AEB), José Augusto de Castro, the bilateral trade results cause concern and reflect Argentina’s low demand, exacerbated by import containment measures decreed by the government of Javier Milei.

Retraction on both ends 

Three of the five main products exported to Argentina experienced significant declines in the first two months of this year. These include passenger vehicles (down 15% with revenue of $212 million for the period); vehicle parts and accessories (down 22% to $201 million); and other manufactured products (-48% with revenue of $78 million). On the other hand, iron ore exports increased (+49.5% to $116 million) as did vehicles for transporting goods (+34.0% with revenue of $67 million).

From the Argentine side, the main products shipped to Brazil were vehicles for transporting goods ($257 million, down 4.22%); wheat and rye ($261 million, up 27.8%); passenger vehicles ($101 million, down 43%); milk, cream, and dairy products (up 3.36% to $64 million); and liquefied propane and butane (down 34% to $53 million).

Source: Comex do Brasil

Click here to read the original text: https://comexdobrasil.com/exportacoes-para-a-argentina-atingem-o-menor-percentual-da-serie-iniciada-em-1997/

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