Exports drop 17 percent while imports decline 11% for a balance of US$6.6 billion
The country’s trade surplus narrowed 17 percent in 2014 to US$6.6 billion, the lowest figure since 2001 when a US$6.2 billion surplus was registered, the INDEC statistics bureau reported yesterday. Imports dropped 11 percent and totalled US$65.2 billion, while exports declined 17 percent to total US$71.9 billion.
The annual results came after INDEC unveilled December’s negative figures. A US$74 million trade surplus was registered in the last month of 2014, 31 percent lower than the same month last year. Exports narrowed 13 percent (US$4.5 billion), a drop which was also seen on imports (US$4.4 billion).
“A large decline of vehicle imports registered throughout the year and the decision by grain exporters not to sell their crops in the first semester of the year are the main factors that explain the low trade surplus,” Nicolás Zeolla, economist at the Scalabrini Ortiz Centre for Economic and Social Studies (CESO), told the Herald. “We saw a record grain harvest last year but the speculation by exporters affected the surplus.”
Almost all exports registered negative figures in 2014 when compared to 2013. Primary products dropped 20 percent, explained mainly by a 35 percent decrease in grain exports. Industrial manufacturing narrowed 15 percent, including a 93 percent drop in the export of boats and planes and an 18 percent drop in vehicle exports, while agricultural manufacturing declined three percent. Fuel and energy exports also were 18 percent lower.
Similar negative figures can be seen in the last month of the year, with the exception of grain exports, which soared 58 percent. Fuel and energy exports dropped 36 percent in December.
“The country saw an improved exports scenario until 2008 thanks to the high value of commodities. That has now changed due to the drop in the price of grains and the complex international scenario,” Mauricio Claveri, trade specialist at the Abeceb consultancy, told the Herald. “At the same time, the regional market is now more open and there’s steeper competition with developed countries.”
Grain exports remained low in the first half of the year as exporters speculated with a new devaluation in order to obtain higher profits. The scenario changed in October when the federal government agreed with farmers to increase the amount of grains sold abroad. The deal helped to bring fresh dollars but wasn’t enough to improve 2013 figures.
“Only 10 companies concentrate 75 percent of the grain exports. At the same time, small and medium companies employ more than 70 percent of the workers,” the head of the CEEN companies centre Francisco Dos Reis said.
The negative scenario on exports was followed by an across the board decrease in imports. The main responsible was the vehicle sector as the fewer sales in the country led to cars imports decrease 49 percent when compared to 2013. At the same time, capital goods accessories dropped 22 percent, fuel and lubricants four percent, intermediate goods 11 percent and consumption goods 10 percent.
December saw a whopping 61 percent drop in car imports, followed by a 28 percent on capital goods accessories and four percent on intermediate goods. On the other hand, fuel and lubricants import rose 16 percent and consumption goods two percent.
Mercosur, the main market
The Mercosur bloc was the country’s main market in 2014 and a trade surplus of US$4.5 billion was registered. Imports dropped 24 percent due to fewer purchases in all areas, while exports dropped 14 percent due to fewer sales also in all areas. A US$418 million surplus was registered in December with a 25 percent drop on imports and a 12 percent decrease on exports.
A trade deficit of US$2.1 billion was registered with the ASEAN bloc and Korea, China, Japan and India. Exports dropped 10 percent due to fewer sales of primary products and fuel, while imports decrease eight percent because of fewer purchases of capital goods accessories and vehicles.
The main destinations of the country’s exports last year were Brazil, China, the United States, Chile and Venezuela, while most of the country’s purchases came from Brazil, China, United States, Germany and Trinidad and Bolivia.
Date: January 23, 2015