The trade balance showed a deficit of USD 0.1 billion in April, from a surplus of USD 1.5 billion in the same month of 2022. The figure underperformed market expectations of a surplus of USD 0.2 billion, according to Reuters. The 12-month rolling trade surplus narrowed to USD 2.6 billion in April, from USD 6.9 billion in December. At the margin, the seasonally-adjusted annualized balance showed a deficit of USD 5.5 billion in the quarter ended in April (from a deficit of USD 3.7 billion in 1Q23).
Exports declined during the quarter ended in April, affected by severe drought. Total exports decreased by 23.9% yoy in the period, after falling by 18.0% in 1Q23. Agricultural exports, including manufactured agricultural products, plummeted by 32.8% yoy in the quarter (from a drop of 26.1% yoy in 1Q23), led by a drought-related reduction in exports of wheat, soy and corn. Exports of other industrial products dropped by 8.2% yoy in the period (from a decline of 4.3% in 1Q23), mostly due to smaller shipments of biodiesel. On a sequential basis, exports fell by 30.0% qoq/saar in April, from a decrease of 47.0% in the quarter ended in March 2023.
Imports also declined, affected by controls. Total imports decreased by 8.9% yoy in the quarter ended in April (from a drop of 4.3% yoy in 1Q23), but rose by 24.4% qoq/saar in April (from an increase of 20.0% in 1Q23). Imports of consumer goods (including cars) dropped by 9.5% yoy in the period, while imports of capital goods and parts decreased by 6.2% yoy. Imports of intermediate goods fell by only 0.2% yoy in the period, due to significant imports of soybeans to be processed locally and exported later.
The deficit in the energy trade balance narrowed slightly. The last 12-month deficit fell to USD 4.4 billion in April, from USD 4.9 billion in December 2022. Energy imports decreased by 37.9% yoy in the quarter ended in April, while oil exports fell by 7.5% yoy in the period.
The trade balance is deteriorating rapidly due to continued downward revision of the grain harvest and a worse-than-expected outcome of the recently implemented multiple exchange rate to move up the liquidation of soy exports. We see significant downward risk to our trade balance forecast of a surplus of USD 4.5 billion for this year, down from USD 7.0 billion in our previous scenario.