MercoPress. South Atlantic News Agency

Argentina trade surplus up 26.9% in June as grains and oilseed exports get moving

The country’s agriculture is recovering from last year’s drought

Argentina's June trade surplus grew by 26.9% to 1.16 billion dollars from 910 million in the same month last year, but the six month period was down 26%, the government's national statistics institute Indec said on Tuesday.

Exports grew by 8% from a year earlier, to 7.55bn, reflecting a stronger grains harvest after last year's drought. Imports grew a more modest 5% to 6.4bn, according to Indec. However in the first half of the year balance, imports were up 11% and exports 5%.

A widening trade surplus is good news for the government, which needs to boost dollar supplies on the tightly controlled currency market. Raw material exports rose 20% in June as the corn and soybean harvests advanced.

Argentina's trade surplus was 4.95bn in the first half of the year, down 26% from the same period a year earlier.

Mercosur was the main trade partner in June with 26% of exports and imports. Sales to the block reached 1.95bn dollars and 11.5bn in the first half of the year while imports were 1.7bn and 9.96bn dollars.

However in the same period Argentina deficits with the European Union reached 1.9bn; NAFTA (US, Mexico and Canada) 1.4bn and with China, Japan and India, 266 million dollars.

In the first six months of the year fuel and lubricants represented 17% of total imports.

The Argentine economy cooled abruptly in 2012 and earlier this year because of high inflation and the negative impact of currency controls on investment.

But the economy has shown signs of improving more recently, thanks to a push in public spending ahead of October's mid-term election, an increase in auto production and rising corn and soy output and overseas sales.

Economic activity jumped 7.8% in May from a year earlier, President Cristina Fernandez said last week.

The Cristina Fernandez's administration repays debts to private creditors using the central bank's foreign currency reserves. The country has been effectively shut out of global credit markets since its massive sovereign default in 2002 and continues to fight litigants in New York courts.