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Argentina's November Trade Surplus Seen Falling to $500 Million -Survey

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12/20/2012 | 08:54pm CEST
Trade Balance: 
               Nov     Oct     Sep     Aug      Nov/11   FY/2011 
Forecast:     +$500M  +$592M  +$950M  +$1.07B  +$651M       - 
Actual:         -     +$585M  +$911M  +$1.63B  +$364M   +$10.01B 
 

By Ken Parks

BUENOS AIRES--Argentina's trade surplus probably continued to shrink in November, owing to a seasonal lull in agriculture exports and an uptick in imports ahead of the year-end holiday season.

The trade surplus is the single biggest contributor to Argentina's international reserves in the absence of significant levels of foreign investment and offshore borrowings by the government and Argentine companies. Those reserves are an important source of funding for President Cristina Kirchner's government.

The national statistics agency, Indec, is expected to report a trade surplus of $500 million for November, according to the median estimate of five economists surveyed by Dow Jones Newswires.

If correct, Argentina's 12-month trade surplus would rise to almost $12.4 billion.

The 2013 federal budget forecasts a surplus of about $12.2 billion this year and $13.3 billion next year.

Gabriel Camano, chief economist at research firm Consultora Ledesma, said the outlook for the trade surplus in 2013 will become clearer in January or February, when analysts have a better idea of how the corn and soybean crops are developing.

The harvest and shipment of both crops starts in earnest in the second quarter.

"When the harvest kicks in we'll see a big increase in exports compared to this year when there was a drought," he said.

Next year's trade surplus is expected to benefit from what many analysts say will be record soybean and corn crops. Argentina is the world's No. 3 soybean exporter, and the leader in soyoil and soymeal exports. It also ranks No. 2 in corn exports.

Import barriers that have spurred the European Union, the U.S. and Japan to file disputes against Argentina at the World Trade Organization have also helped the South American country boost its trade surplus.

Since late 2011, Argentina has aggressively blocked imports to protect domestic producers and to boost the central bank's reserves.

Since early 2010, Mrs. Kirchner has used $21.1 billion of those reserves to pay her government's creditors.

The federal budget calls for using almost $10 billion in reserves to pay debts and to fund public works projects in 2013.

Indec is scheduled to publish its monthly trade report Friday at 2 p.m. EST (1900 GMT).

-Write to Ken Parks at ken.parks@dowjones.com

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