Trade between Brazil and Argentina see steady growth in April

According to data from the most recent bilateral trade report drafted by the Argentine Chamber of Commerce and Services (CAC), bilateral trade between Brazil and Argentina totaled USD 2,554 million in April 2023, up 11.1% from the trade value recorded in the same period last year. Conversely, the exchange rate retreated 7.5% compared to last March due to the drop in exports by 24.9%, offset by the increase in imports by 5.5%.

Sales of Argentine goods to Brazil fell 13.6% in April 2023 compared to April 2022 (the end of an upward trajectory initiated three months ago), totaling US$ 889 million, while imports from the Portuguese-speaking country to its southern neighbor stood at US$ 1,665 million, with a year-on-year increase of 31%. As a result, Argentina’s trade balance showed a deficit of US$ 776 million.

The trade between the two countries also ended in a deficit for Argentina in the first quarter of the year, at US$ 1.775 million. It is worth mentioning that exports grew 7% in the first four months of 2023 compared to the same four months in 2022, while imports from Brazil increased by 26.2% in the same period.

Containerized trade between Brazil x Argentina | Jan 2020 – Feb 2023 | TEU

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It is worth mentioning that Brazil is Argentina’s main trading partner, a relationship that has historically left Argentina on the short end of the deal because items from South America’s largest country are usually strategic for the Argentine productive fabric.

The year-on-year decline in exports from Argentina to Brazil in April (-13.6%) was mainly due to a decrease in the sales of passenger cars and raw wheat and rye, while the year-on-year increase in Argentine purchases (+31%) was driven by soybeans, tubes, hollow sections and accessories for tubes, iron or steel, passenger cars, auto parts and accessories, and iron ore and its concentrates.

Argentina ranked fourth among Brazil’s largest suppliers of goods, only behind China, Hong Kong, and Macau (US$ 3.879 million), the United States (US$ 3.256 million), and Germany (US$ 947 million). In turn, Argentina is the third largest buyer of Brazilian products.

Brazil’s exports to the rest of the world declined 5.5% in April 2023 versus the same month in 2022, falling from US$ 28.970 million to US$ 27.365 million. As a result, total imports declined 7.7% year-on-year (US$ 20.743 million in 2022 versus US$ 19.140 million this year). Thus, for the fifteenth consecutive month, the Brazilian commercial result was in surplus at US$ 8.224 million, a scenario very similar to that seen in April 2022, when the balance was positive by US$ 8.227 million.

A projection by the Brazilian Central Bank indicated a slight increase in the expected economic growth for 2023 (from 0.90% to 1%). Prices are on the path to increasing 6.05% in the year, a higher variation from the 5.96% forecast last month. Also, the basic interest tax Selic should end the year at 12.5%, lower than the current 13.75%.

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