He goods trade surplus would continue during 2025although it would reach a lower level than last year and will register growth in both imports and exports. “A large trade surplus in goods – accrual basis – is expected, although less than in 2024,” says a private consulting firm.
The report from the consulting firm Invecq indicates that this trend will be linked to an increase in exports and imports. And, with a positive balance of US$17,371 million until November, the calendar that ends in 2024 marked a historical record in the nominal figure measured in current dollars, according to what was expressed by the international trade analyst, Marcelo Elizondo. . It also reversed the deficit scenario of 2023, when it ended in negative territory for US$6,926 million.
Imports will grow more than exports
In this regard, he specifies that “on the one hand, Imports would grow, given i) the economic recovery, ii) the lowering of the official dollar, iii) the elimination of the PAIS tax, and iv) the normalization of its payment“. While “Exports would also increase, but to a much smaller magnitude; in particular, due to the notable drop in the price of agricultural commodities (e.g.: the price of soybeans went from US$520/tn in 2023, to US$450 in January 2024 and US$350 recently)”.
In this sense, Elizondo points out that, “if the latest futures and projections of the Stock Exchanges are used for the planted area, “The production of corn, soybeans and wheat in the 2024/25 campaign could be US$4.5 billion less than that of 2023/24”.
Trade surplus in November
The latest official data of the National Institute of Statistics and Censuses (INDEC) of commercial exchange of Argentina corresponds to November and showed a surplus of US$1,234 million, since exports reached US$6,479 million and imports totaled US$5,245 million.
Foreign sales increased 31.6% year-on-year in value, given the 35.5% increase in quantities and the 2.8% decline in prices.. In this way, exported volumes have accumulated eleven consecutive months of increases (25.5% accumulated).
For their part, imports fell 4.3% year-on-year, largely due to lower prices (-3.9%), since quantities remained practically constant (-0.2%). In accumulated terms, external purchases decreased by 20.2%, mainly due to the sharp drop in quantities (-17.1%).
From Invecq they explained that ““This dynamic is explained by i) its increase in price after the devaluation and increase in the COUNTRY tax, ii) the strong recession, and iii) the over-importation of some goods in 2023, given the exchange rate delay.”.
Lower international prices and currency appreciation: bad for soybeans
And, from Invecq they point out that “at a micro level, The combination of lower international prices and exchange rate appreciation means that, today, the domestic purchasing power of soybeans is at historic lows.40% lower than the 2018-2023 average, and only comparable with those at the end of 2015 and 1999-2001″ and considered that “from a strictly sectoral point of view, it has rarely been as necessary as now to eliminate export duties.”
At the same time, it adds to the analysis the impact of the slowdown in the Federal Reserve’s rate reduction, announced at the organization’s last meeting of the yearwithin the framework of an upward revision of inflation, which would give less room for further cuts. In this regard, the consulting firm states that “maintaining high rates for longer strengthens the dollar to the detriment of emerging currencies and weakens the prices of commodities.”
Along these lines, he provides that “Indeed, the dollar index grew 1.1% on the day of the announcement and reached the highest level after the November 2022 high, while the Treasury bond yields (which had already been recovering) increased 1% that day and 2.8% the previous day”, while he points out that, “in parallel, all commodities reacted downwards on the day of the announcement ( soybeans -2.4%, corn -1.4%, gold -1.7% and oil -0.5%), although they recovered slightly in the following days.”
Source: Ambito
