Brazilian imports registered an upward trend, which was a relief for the regional economies of Argentina. The provinces that depend the most on Brazil include - Buenos Aires, which ships out 30% of its exports to that destination; Misiones (29%), Rio Negro (24%), Mendoza (18%), Salta (16%) and Entre Rios (13%).
Sales to that destination were not only impacted by the recession in Brazil, but also - and fundamentally - by the loss of local competitiveness. In recent years, a wide range of Argentine products have lost market share in Brazil, while competing countries have increased their participation in that market. Argentina's garlic, for example, has lost market share to the Chinese variety.
According to economist Jorge Day, imports also depend on the purchasing power of the dollar and, since the price of the dollar fell in Brazil in the last two years, they should import more. "A greater growth of the economy and a cheaper dollar are two forces that contribute to increase their imports," he said.
In Patagonia, the jurisdiction most linked to Brazil is Rio Negro, which shares its specialty in pears and apples with the Alto Valle. Although there was a slight improvement at the beginning of this year, their exports have been falling for several years.
In Cuyo, Mendoza is depends the most on Brazil, especially in agricultural (garlic) and agroindustrial products (some wines, industrialized fruits, and olive products). This year, producers expect to have good harvests, so these industries will have more raw material to produce and export.
"The impact is not even regionally. The jurisdictions that export regional products are the ones that will benefit the most from Brazil's increase in imports, thanks to their higher (albeit slight) growth and the higher cost of their economy," Day said.
He stressed that this conjuncture should not make them forget that these sectors have not been favored by the policies of the last decade, which reduced their competitiveness: "In general, their costs increased at a faster pace than sales prices. Argentina's lower competitiveness also hit commodity prices; if the exporting sector has an increasingly hard time selling, they have less and less funds to pay for their inputs, which is the price paid to producers," he added.
In addition, the economist emphasized that, since Argentina is more expensive, Brazil has chosen to replace it as a supplier in several products. As a result, in recent years, purchases of products from Argentina have fallen more - or increased less - than the products from the rest of the world. There are a few exceptions, such as malt, beans, and dried plums.
Source: La Nación