MercoPress. South Atlantic News Agency

Record exports in dollars for Uruguay in 2013, but prospects not so encouraging

Soybeans has become the main export item and China the leading trade partner

Uruguayan exports in 2013 increased 4.8% in value and reached a record 9,155 billion dollars with soybean the main item and China the leading trade partner. The data was released by the government export promotion organization Uruguay XXI, which sometimes is over optimistic.

 The official figures from the Central bank have been updated to November and the final score will be available sometime in late January.

Imports on the other hand, which did not include oil of which Uruguay is totally dependent, increased 11.8% and reached 9,533bn dollars.

Overall considering the global situation, “it was a good year” according to Uruguay's Union of Exporters, but there is growing concern about the regional demand for 2014, even when overseas sales are estimated to increase 4% to 5% in value. In effect exports to Brazil were down 2.2% and to Argentina, 5.4%.

“Exports increased but if you compare all items except soybeans, in 2013 there was a slight drop: in other words it's good but an in depth look tells us a slightly different picture”, said Alvaro Queijo, president of the exporters union.

Last year was record for soybeans in Uruguay, both in area sown, crop and yield, which meant a 34% increase in export dollars because of a 35.5% increase in volume, with prices high in historic averages but 1.1% down from the previous crop.

Other produce which rank among Uruguay's main exports actually decreased, frozen beef down 7.8%; rice, 7.6% and wheat 29%. Likewise the rate of exports was uneven during 2013: in the first quarter they were down 12% because of the poor crops and wheat quality, but the rest of the year they increased on average 9%, with another dip in November.

If exports completed through the free trade zones are included, total exports in 2013 reached just over 10bn dollars, up 4.8% over 2012, says Uruguay XXI. Pulp, pharmaceutical products and concentrate for soft drinks, are among the leading ten exports produced or transformed at the free trade zones.

However Queijo warned that even if in dollars the overall exports' number is historic, “if we exchange them to Uruguayan pesos it is not a record, and we exporters have to pay our inputs, salaries, taxes in pesos”

“We are concerned because the Uruguay cost or competitiveness has not improved, rather the contrary, we are again lagging behind the region and this is going to complicate us in the future” pointed out the exporters' union head.

And competitiveness is not only the exchange rate, “it is productivity, State efficiency and this is where we have to work most to improve it”.

Queijo also demanded improved international relations and links with such big league players as the European Union, because as of 2014 Uruguay has lost its tariffs preferential system, because the World Bank considers Uruguay in the high middle-class economy category for the last three years. This will have a special impact on hake, citrus and orange juice concentrates.

“It is good to have diversified markets but we must also ensure that manufactured goods continue to be competitive, because the Uruguay-cost could have them disappear from the country's list of exports”.

In effect exports to China soared 45.2% because of massive sales of soybeans and beef, and if pulp and soy from free zones are included, it became Uruguay's main trading partner.