In step with soybean imports, trade deficit with Brazil widened to $2.537 billion

Share This Post

- Advertisement -

In the first five months of the year, trade between Argentina and Brazil recorded a deficit of, $2,537 million. Due to the drought, imports of soybeans for milling from the neighboring country have increased.

- Advertisement -

In May the deficit with Brazil was 763 million dollars. Compared to May 2022, the increase in bilateral trade red was 21.7%. These numbers are a direct consequence of the drought. Given local shortages, there was a 531 percent jump in soybean mill imports to a record $500 million nominal.

Argentine sales to Brazil decreased by 4.8% in May 2023 compared to May 2022 (second consecutive month of decline) adding US$1,164 million, while imports from that destination were US$1,927 million and showed a year-over-year increase of 32%.

- Advertisement -

In the first five months of the year, the bilateral trade balance with Brazil accumulated a negative balance of US$ 2,537 million, an amount that already exceeds the bilateral red for all of 2022 (2,245 million dollars).

Consulting firm Abeceb says this commercial red jump “is happening in a context in which the Central Bank finds itself with negative reserves despite recent soybean 3 dollar and Sergio Massa talks China failed to get aid from BRICS for import financing.”

In May The record buying of soybeans alone accounted for 25% of Argentine imports to Brazil for the month in a context where the local drought occurs at the same time as a super harvest in the neighboring country.

Foreign purchases in the automotive sector are also on the rise. Imports of “Automotive Parts and Accessories” and “Passenger Cars” increased by 27.9% and 23.5% respectively.

The 4.8% decline in Argentine exports to Brazil marks a major change from what happened in the first quarter, when Argentine sales increased by 15.2%, mainly driven by automobiles.

A report from the Argentine Chamber of Commerce (CAC) details this Argentina ranked third among Brazil’s largest suppliers, behind China, Hong Kong and Macao ($4,557 million) and the United States ($3,693 million). In turn, among Brazil’s top buyers, Argentina ranked third, behind China ($10.680 million) and the United States ($3.270 million).

Brazil’s exports to the world increased by 11.6% in May 2023 compared to the same month in 2022, from US$ 29,642 million to US$ 33,068 million. For their part, total imports decreased by 12.1% compared to those recorded a year ago (24,685 million dollars in 2023 against 21,689 million dollars this year).

what’s coming

For Abeceb, soybean purchases from Brazil will continue. “Moving forward, the need to import soybeans for milling which will mainly come from Brazil, Paraguay and Bolivia will continue to put pressure on the bilateral trade deficit. If this level of imports were not recorded, milling would decrease by 37% in 2023“.

But they warn that “with an unreserved central bank, the government is very likely to try to further tighten the import tourniquet whereas the end of the bumper harvest and soybean 3 dollar will come in the second half.”


Source: Clarin

- Advertisement -

Related Posts