Argentina First-Quarter Trade Surplus Was Smallest Since 2000Charlie Devereux
Argentina posted the smallest first-quarter trade surplus since 2000, the year before it defaulted on a record $95 billion, as exports fell 16 percent in March.
The trade surplus narrowed 92 percent to $121 million in the first three months of the year from $1.61 billion in the same period last year as exports of cereals fell 57 percent.
Locked out of capital markets since the default, Argentina, the third-biggest exporter of soybeans in the world, is struggling to shore up reserves that have fallen near a seven-year low as President Cristina Fernandez de Kirchner taps them to pay foreign debt obligations.
The decline in grain exports has been caused by a decrease in demand for corn as U.S. output has recovered from a severe drought last year, said Guillermo Rossi, a grains market analyst at the Rosario Grains Exchange. The government also restricted wheat exports to 1 million tons in the first quarter compared with 3 million tons in the same period last year, Rossi said. The soybean harvest was 17 percent delayed as of mid-April due to heavy rains, according to the Buenos Aires Grains Exchange.
“When you analyze these numbers you’re talking about price and quantity and both of these had significant declines,” Rossi said in a telephone interview from Rosario, Santa Fe province.
From the same month a year earlier, the March trade surplus narrowed 95 percent to $41 million from $811 million after exports fell 16 percent, the biggest monthly drop since October 2009.
Argentina last year posted the biggest current account deficit in 13 years. The government in January devalued the peso 19 percent to boost exports and is seeking to mend relations with international investors in a bid to issue debt for the first time since the default with reserves near a seven-year low of $27.9 billion.