Consulado y Centro de Promocion Argentino en Shanghai

ARGENTINA TRADE OUTLOOK Nº 15

(June 2004)

EXPORTS: OUTSTANDING PERFORMANCE IN JANUARY-APRIL OF 2004

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* Last April, exports reached a historical record value: USD 3,025 million, with a 14% annual increase in the first four months of the year.

* Prices made a significant contribution to this expansion (+10% annual); however, volumes traded also performed well (+4% annual).

* Primary products registered a lower share in total exports and soy was not the only product contributing to the expansion of agricultural manufactures.

* After the standstill in 2003, exports of industrial manufactures are also showing a satisfactory performance, not only sales to Brazil but also to other countries (Chile, Andean Community, South East Asia, Korea and Japan).

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Last April, exports reached a historical record value: USD 3,025 million, showing a remarkable annual growth of 23%. During the first four months of the year, sales abroad cumulated a record level for the period: USD 10.3 billion, which represents a 14% annual increase. Like in recent months, prices made a significant contribution to this expansion (+10% annual); however, quantities traded also performed well (+4% annual).

FACTORS UNDERLYING THE EXPORT GROWTH

January-April of 2004

USD Part. in

million total var.

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EXPORTS VARIATION 1.293 100%

Total price effect 898 69%

Total quantity effect 395 31%

POSITIVE DRIVERS

MAO prices 685 54%

Primary products prices 286 22%

MAO quantities 211 16%

MIO quantities extra Brazil 129 10%

MIO quantities Brazil 102 8%

Fuels quantities 90 7%

MIO prices 25 2%

NEGATIVE DRIVERS

Fuels prices -107 -8%

Primary prod. quantities -138 -11%

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MAO (manufactures of agricultural origin) and

MIO (manufactures of industrial origin).

Source: CEI based on INDEC.

Beyond this remarkable performance, certain facts underlying these figures should be highlighted. In the first place, although it is premature to hold that the trend has already consolidated, primary products have registered a lower share in total export in the beginning of this year (22% in 2004 vs. 23.4% in 2003). Agricultural and industrial manufactures (+32% and +11% annual, respectively) are leading the exports expansion, in a context of a lower growth of primary products (+7% per year), despite the current high level of international prices of these commodities.

THE MOST DINAMYC PRODUCTS

(January-April 2004)

Products % annual var.

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Copper ore 84%

Diary products 73%

Processed meat 63%

Pellets and flours 48%

Plastics 34%

Textiles and clothing 28%

Paper, cardboard & pub. 26%

Oil seeds 25%

Fats and oils 24%

Petroleum gas 23%

Chemicals 20%

Furs and leathers 13%

Machinery & equipment 12%

Automobiles 11%

Fresh fruit 7%

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Source: CEI based on INDEC.

In the agricultural manufactures segment, the expansion of the soy by-products exports, such as flours, pellets and oils, explained an important part of the growth, but the contribution to this expansion of processed meat, diary products, furs and leathers and industrialized sea food, should not be underestimated.

Another remarkable fact is that industrial exports are growing after last year stagnation. This expansion is basically the result of the increase in quantities sold abroad. Furthermore, the expansion of sales involves a large variety of industrial products that also performed well last year, like, plastics, chemical products, paper, cardboard and publications, together with products like automobiles, machinery, equipment and textiles.

Although industrial sales recovered as a result of the better performance of exports to Brazil (basically of chemical products, plastics, metals and their manufactures, machinery and equipment, automobiles), which registered a 16% annual increase in the first four months of 2004, the volume of shipments to other destinations is also growing (+9% annual), particularly to Chile and the members of the Andean Community1, and to a lesser extent, to South East Asia, Korea and Japan.

Finally, fuel exports remained almost unchanged in the January-April period (-1% annual), mainly as a result of the behavior of crude oil and gasoline sales, but the quantities sold abroad registered a 5% annual increase during such period, a remarkable rise after their poor performance in 2003 (-3% annual).

(1) The Andean Community includes: Venezuela, Peru, Bolivia, Ecuador and Colombia.