MercoPress. South Atlantic News Agency

Uruguay's exports up 31% but beginning to slowdown

In spite of a record year in export value, Uruguay's overseas sales are beginning to feel the international pinch from a weaker demand and lower prices for commodities according to the release of the latest statistics.

October exports totalled 506 million US dollars, 30.8% higher than the same month a year ago, and the highest percentage increase of the last three months compared to the same months in 2007: August 20% and September, 25.8%. However overall October was the lowest figure in the last seven months, evidence of a slowdown linked to weaker international demand, particularly regarding the prices of some of Uruguay's main commodity exports, beef, wheat, corn and dairy produce, Another symptom of the slowdown is that during the August/October quarter exports were down 16.7% compared to the May/July quarter. But in spite of weaker prospects Uruguay's exports in the ten months to October reached 6.2 billion US dollars, which is 40.6% higher than the value of exports for the same period last year, 4.4 billion US dollars. Besides exports in the last twelve months are higher than those for the whole of 2007 (4.6 billion US dollars). At the current rate Uruguayan exports value would confirm six year running increases: 2003, 12.9%; 2004, 33.1%; 2005, 15.3%; 2006, 16.5%; and last year 15.8%. In related news the Uruguayan Exporters Union has proposed eliminating the US dollar in trade with Brazil since importers are reluctant to assume exchange rate risks given the international instability of the US currency. Apparently in recent weeks several deals fell through because Brazilian importers insisted that Uruguayan exporters assume the exchange rate risk. The Brazilian currency Real has lost almost 30% of its value against the US dollar in two months. "Brazilian importers live under stress not knowing how much they will have to pay in Reales", said Teresa Ashemberg president of the exporters union. The union has proposed to the Central Bank that Uruguay join the Argentine Brazilian initiative of bilateral trade in their own currencies, Pesos and Real. "We want Brazilian importers not to suffer stress and have certainty about the exchange rate when they close a deal", added Ashemberg. "The central bank is open to the initiative and is considering it"revealed Ms Ashemberg who added that the latest example of "Brazilian stress" refers to the import of the coming Uruguayan wheat crop. "They insist we cover the exchange rate risk". In October Uruguayan exports to Brazil dropped 12% in US dollars compared to a year ago, from 79.6 to 69.8 million US dollars.