Annabella Quiroga
05/29/2020 - 16:12
- Clarín.com
- Economy
- Economy
In April China became the main destination for Argentine exports . In this case, the coronavirus played in favor of the Asian country: since our exports to that region are basically food, they were able to grow amid the pandemic. On the other hand, the manufactures of industrial origin that have in Brazil - hacked by the Covid-19 and the political turmoil - their main market collapsed.
Last month, exports to China reached $ 509 million and imports totaled $ 411 million. Sales to the Asian country rose 50.9% in the month, while purchases fell 40.9%. On the other hand, exports to Brazil reached US $ 387 million, a decrease of 57.3% and imports fell 45.4%, reaching US $ 519 million, always according to the INDEC report.
66.8% of sales to China last month were concentrated in soybeans and beef.
According to IERAL data, Argentina has a 23% market share in Chinese beef purchases . "If this portion of the market can be defended, we could be placing some 480,000 tons, 28% more than in shipments in 2019," they say.
Argentina's share
of Chinese meat imports
Tap to explore the data
BOVINE MEAT
AVIAN MEAT
SWINE MEAT
Source: IREAL Infographic: Clarín
Foreign trade analyst Marcelo Elizondo points out that in Chinese purchases " there is a seasonality, because most of the export of agricultural products is registered in the first part of the year. In addition, in the midst of the pandemic, industrial products are more affected and the foods sold to China are the least affected. So there is a bit of an exception to the April data . "
While Brazil remains bogged down in the pandemic, with forecasts for a 6% drop in activity for this year, China, which was the birthplace of the coronavirus, is already growing again .
With last year's foreign trade data, China represents 12% of total exports and Brazil represents 17%. Six years ago the neighboring country was 25%.
Can China replace Brazil as a central destination for Argentine sales? "It is complicated," replies Elizondo. "What we sell to remote destinations are agricultural products, and that is where primary products, such as grains, and agricultural manufactures, such as oil, enter. Instead, we sell industrial products to Brazil. There are sectors such as the automotive sector that are Brazil- dependent. The type of offer we bring to Brazil is very difficult to relocate to other markets. There are some possible markets in the region, but being smaller they are less attractive. In addition, many SMEs export to Brazil that are difficult to reach to more distant markets. "
For Elizondo with the crisis unleashed by the pandemic, the country's total exports would fall 10% this year. For consulting firm Abeceb, the drop would be 15%. For external sales to grow again, "quality must be improved. From now on, the world's main markets will be more demanding. Argentina has a great capacity to meet this requirement with agricultural manufactures. In traditional industry, it is necessary a lot of investment and a lot of modernization of the offer, "says Elizondo.
When talking about the growth of exports to China, one of the questions that arise is that prioritizing the Asian market would lead to a "primarization" of foreign trade . For Elizondo this is not necessarily the case. "Agricultural exports today are more than 60% of the total, they represent more than US $ 40,000 million. For me it is not a problem because they are products with a lot of incorporated technology . They include precision agriculture, agricultural engineering, satellite and radar, direct seeding, among other things".
One of the advantages of the agricultural sector is that although it is highly dependent on the climate - as the 2018 drought showed - it is also less dependent on macroeconomic factors. "As the increasing retentions and the doubled exchange rate demonstrate, the sector has a great resilience that clearly others do not have."
Emilia Calicibete, an analyst at the LCG consultancy, has qualms about China's role. "It would be necessary to see how the world is rearranged in terms of value chains, and how Argentina is inserted in this new context. We are facing an unprecedented event in which approximately a 30% drop in international trade is expected, which surely It implies structural changes. It is very difficult to know what this new dynamic will be like, but Brazil is a great trading partner and once the sectors that were unemployed during this time have reactivated, I do not think it will be replaced by China . "
Regarding employment, Elizondo highlights that agricultural production generates very large value chains. "They are the main clients of the banks and the transport chain, among other items, and they are also the major contributors of dollars and taxes . The agricultural sector generates more than cold statistics suggest." Still highlights that "it would be good if there were an evolution in other areas. One that has a lot to give in employment is the knowledge industry: software, international services and consulting."
