Despite President Mauricio Macri’s pledge to make Argentina the “world’s supermarket” instead of the “world’s breadbasket,” the country’s exports have shifted further towards raw materials in the first half of the year, with a steep increase in shipments of agricultural goods with no added value.
The country’s trade balance reported a $479 million surplus in the first six months of the year, according to the INDEC statistics bureau. But the positive trend is likely not to continue, experts agree, as the agricultural-focused Argentine exports have already reached their peak in the first half of the year, Yahoo Finance reported.
“Through fiscal benefits and a devaluation, the government encouraged more exports of primary products with no added value. That agrees with the fact that Brazil, Argentina’s main trade partner, continues falling and that leaves no room for the Argentine exports to grow,” Mauricio Claveri, foreign trade specialist at the Abeceb consultancy, told the local daily Herald.
Soon after taking office, Macri eliminated export duties on agricultural goods including beef, wheat and corn while cutting a duty on soybeans by five percentage points. At the same time, farmers benefited from a devaluation of the peso of over 30% in December, going from 9.80 to 14 pesos to the US dollar.
Both measures encouraged an increase in shipments of primary products and agricultural manufactures, while at the same time leading to a further drop in exports of industrial manufactures, fuel and energy.
As a whole, the amount of goods exported in the first half of the year rose 8%, while imports increased 9.1%.
Exports Rise
When looking at each sector, primary products exports rose 9.6% between January and June. Agricultural exports with no added value were the ones to see the best performance. Shipments of processed meat dropped 4.8% while raw animal exports soared 46.2%. Meanwhile, pork and white meat imports rose 98 and 127% respectively.
The same trend was seen in wool exports, with a 48.4% increase on raw wool and a lower 23.1% growth on already processed wool. Shipments of cereals increased by 23.8% while exports of grain mill products dropped 13.5%. The exported primary product that showed the best performance was unprocessed tobacco, which rose 170% in the first half of the year.
Unprocessed vegetables exports rose 58.5%, much higher than the 9.7% increase of the processed ones.
Meanwhile, shipments of coffee, tea and yerba mate dropped 23.5%, followed by a 34.1% plunge in dairy products. The only case in which Macri’s pledge was fulfilled was in oilseeds exports, which dropped 16% while oil and fats rose 22.3%.
