Mexico June trade gap driven by falling crude exports

Market: Coal, Metals
13/08/24

Mexico's trade balance swung to a deficit of $1.04bn in June, impacted by reduced oil exports at lower prices and a weaker peso.

The trade gap in June flipped from a $1.99bn surplus in May, acccording to statistics agency Inegi's final estimate, as exports fell at nearly twice the rate of declines in imports.

Exports fell by 12pc to $48.9bn in June from the prior month, while imports declined by 7pc to $49.9bn from the prior month.

The trade balance was in deficit for four of the six months in the first half of 2024. The deficit in the first half of the year was $5.5bn compared with a $6.5bn deficit a year earlier.

In explaining the June deficit, Banorte cited "a slight moderation in oil prices relative to May, with the Mexican oil mix averaging $73.49/b in the month; a depreciation of the Mexican peso; and the temporary suspension of exports of some agricultural products to the US."

Likewise, exports were down 5.7pc from June 2023, while imports were 3.6pc lower than a year earlier.

The deficit was below Mexican bank Banorte's forecast for a $450mn surplus in June.

Inegi breaks Mexico's trade data into two broad categories of "oil" and "non-oil", where the oil category includes crude, natural gas, oil derivatives and petrochemicals. Non-oil includes everything else from light vehicles and farm goods to copper and other mined minerals,

Exports in the broad oil category declined by 33pc to $2.1bn in June from $3.2bn in May, with imports down by 13pc at $2.82bn in June from $3.23bn in May. Exports were down by 27pc from a year prior, with imports down by 26pc.

Within this, crude exports were valued at $1.73bn in June, a sharp drop from $2.15bn in May and lower than the $2.44bn in the same month of 2023.

Natural gas imports, meanwhile, were valued at $395mn in June from $316mn in May and $469mn in June 2023.

Non-oil exports reached $46.8bn in June, with $15.6bn from automotive exports. This was down by 5pc and 5.2pc, respectively from May.

Still, as reported last week by Mexico's auto associations, auto exports have climbed by 8.4pc in the first seven months of the year from a year earlier.

By James Young

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