Argentina's March Trade Surplus Swells To $1.08 Billion
First Published Monday, 23rd April 2012 11:00 pm - © 2012 Dow Jones
--Surplus more than double year-earlier figure as government's efforts to limit imports take hold
--Imports plunged 8%
--Kirchner government aggressively trying to stem imports in bid to retain international reserves
(Updates with energy trade balance)
By Ken Parks
Of Dow Jones NEWSWIRES
BUENOS AIRES -(Dow Jones)- Argentina's trade surplus jumped to $1.08 billion in March, as the government's efforts to limit imports took hold.
The trade surplus was lower than the $1.34 billion reported in February but more than double the downwardly revised $518 million reported in March 2011, the national statistics agency, Indec, said in a statement.
Indec was expected to report a surplus of $980 million, according to the median estimate of more than 50 banks, economic research firms and universities surveyed by the Central Bank of Argentina.
Indec said exports increased 2% on the year to $6.28 billion in March, with volume rising 6%, but prices down 4%. Export growth was led by chemicals, metals, grains and dairy products.
Imports plunged 8% to $5.20 billion, owing to a 7% drop in volume and a 1% decline in prices. Almost all import categories registered declines except for spare parts and automobiles.
Argentina posted a neutral energy and fuel trade balance in March, though for the quarter it ran a $371 million deficit.
That deficit is expected to widen later in the year as Argentina's pending nationalization of its largest oil and gas company, YPF SA (YPF, YPFD.BA), disrupts hydrocarbon production.
Argentina became a net energy importer for the first time in almost two decades last year due to falling oil and gas production.
President Cristina Kirchner blames the sorry state of the country's energy affairs on YPF's lack of investment, a charge the company has roundly denied.
The Mercosur customs union--whose founding members are Argentina, Brazil, Uruguay and Paraguay--was the destination for 25% of Argentina's exports and the source of 30% of imports last month.
The politically sensitive trade deficit with Argentina's top trading partner Brazil narrowed 57% on the year to $167 million in March, and shrank 43% to $481 million in the first quarter. Argentina posted a $4.2 billion deficit with its larger neighbor in 2011.
Kirchner has become increasingly aggressive in her attempts to stem imports that must be paid for in hard currency that her government can ill afford to lose. The central bank's international reserves are a key source of financing for the administration.
Earlier this year, the government started requiring that nearly all goods and services purchased abroad must first be vetted by a host of agencies before they can be brought into the country.
In March, the U.S., the European Union and a dozen other countries issued a joint statement calling on Argentina to take immediate steps to remove or end "import-restrictive measures and practices" that may violate global trade rules.
Argentine policy makers have denied accusations of protectionism, saying their trade policies aim to prevent other countries from dumping goods at unfair prices in Argentina to the detriment of local manufacturers.
-By Ken Parks, Dow Jones Newswires; 54-11-4103-6740; firstname.lastname@example.org