MercoPress. South Atlantic News Agency

Argentina’s April trade surplus suffers significant contraction on soaring imports

With a strong economy demand for imported goods is soaring

Argentina's trade surplus narrowed 38% in April compared to a year ago with imports increasing far more swiftly than exports, official data showed on Monday.

April's surplus came in at 1.30 billion US dollars, down from 2.11 billion USD April 2010. Exports rose 12% from the year-ago period to 6.95 billion USD, while imports jumped 38% to 5.65 billion.

Argentine exports have been climbing briskly boosted by high prices for grains and oil seeds and strong demand for cars from neighbouring Brazil, but imports have been rising even faster.

Robust growth in Argentina is stoking demand for imported consumer products and capital goods for industry and high inflation is making foreign-made goods relatively cheaper.

A surge in purchases abroad has prompted the government to increase import hurdles as it seeks to protect the trade surplus, a pillar of President Cristina Fernandez's economic policy.

The Argentine government applies non automatic licences to delay or discourage imports and has an aggressive policy of promoting domestic production to substitute imports. Virtually cut off from the voluntary credit market Argentina is forced to have a trade surplus.

However, earlier this month Argentina was startled when Brazil started demanding import permits for foreign-made cars alarming Argentine automobile exporters.

Trade officials from both countries on Monday began a round of talks to overcome the dispute. Brazil last Friday started liberating car imports from Argentina delayed in the border as a signal or willingness to solve the situation.

Argentina argues that it is forced on occasions to delay Brazilian imports given the steep deficit it suffers in bilateral trade.