MercoPress. South Atlantic News Agency

Reflecting recession, Argentina’s foreign trade dropped by 40% during August

The fall in volume and value of exports hit mainly agriculture goods

Argentina's August trade surplus dropped 48% from the same month a year ago to 1.16 billion US dollars as exports sank, the government said on Friday. Imports fell by 37% during the month to 3.25 billion, while exports dropped by an even bigger 40% to 4.40 billion USD due to lower prices and reduced volumes, particularly by the drought-hit farming industry.

Sales of manufactured agricultural goods, which include top export earners soy-oil and soy-meal, fell by 35% during the month. Overall volumes of agricultural goods fell by 26%, while prices dropped 16%.

A prolonged drought slashed Argentina's last soy harvest to 32 million tons, way down from the previous crop of 48 million tons.

Demand for imported consumer goods and machinery has been falling as Argentina’s economy slows down. The economy registered its first quarterly contraction in GDP according to the Friday release from Indec.

Despite August's drop, in the first eight months of the year, the trade surplus widened by 45% to 12.33 billion USD over the same period last year (8.5 billion USD). Total exports in the first eight months of 2009 reached 36.5 billion USD while imports fell to 24.2 billion USD.

“The less value of exports compared to August 2008 was mainly because of a fall of 20% in export prices and 25% of volume”, said Indec. Regarding imports “the reduction in volume was 25% and in value 16%”.