Argentina’s external trade continues to show positive figures, but margins are narrowing and warning signs are beginning to emerge.
June closed with a trade surplus of $906 million, the highest this year, marking 19 consecutive months of favorable balances. However, the monthly data conceals a less optimistic trend: in the first half of the year, the total surplus was just $2.788 billion, a 74% drop compared to the same period last year.
The explanation is straightforward: while exports grew by 4% in the first half of the year, imports surged by nearly 35%, driven by a sharp increase in volumes, particularly in capital goods, vehicles, and consumer goods. This widening gap is putting growing pressure on the trade balance and foreshadows a more challenging second half.
### **Agro Stagnant; Energy as the Export Driver**
According to the foreign trade monitor by the International Strategy Institute of the Argentine Exporters Chamber (CERA), June saw an export recovery, with shipments totaling $7.275 billion—a 10.8% year-on-year increase. The boost came from higher volumes, which rose by 11.2%, offsetting a slight decline in prices.
But the real leap was on the import side: $6.37 billion in foreign purchases, a 35.9% increase compared to the same month last year, with volumes up by 53%. In other words, the economy is once again demanding inputs and goods, and at an accelerating pace.
The CERA report highlights that export growth is uneven. Fuels and energy lead the way, with a 74% increase in value and a 110% surge in volumes. Industrial manufactured goods also improved, though at a more moderate pace. However, agricultural products, both raw and processed, showed almost no growth. Exports remain concentrated in a few key products: soybean meal and pellets, crude oil, corn, and soybean oil. The volume changes, but the structure does not.
### **Imports: Cars, Technology, and Capital Goods**
On the import side, the picture is more uniform: purchases rose across nearly all categories. The most striking figures were for cars, which grew by almost 250% in value, and capital goods, which doubled. Only fuels declined, due to a combination of lower prices and reduced seasonal demand.
Bilaterally, the trend is concerning. Argentina accumulated a deficit of over $3.2 billion with Brazil, $5.2 billion with China, and $1.6 billion with the European Union in the first half of the year. Only with Chile and India did it maintain a significant surplus. Key strategic partners are selling more to Argentina than they are buying, and the gap is widening.
### **Surplus Reliant on International Prices**
But perhaps the most revealing statistic is another. If June’s surplus is adjusted for improved terms of trade—meaning favorable international prices—the real balance would have been just $147 million. In other words, without this tailwind, the external balance would already be at risk.
Foreign trade is still bringing in foreign currency, yes. But the margin is shrinking, and the current dynamic does not appear sustainable. If exports fail to gain speed and diversification, and if imports continue expanding at the pace of economic recovery, the surplus could vanish before year-end.
