MexECON Blog

January Export Rise Confirmed

In a revised report yesterday, Mexico's January merchandise trade surplus was revised upward to $244.9 million.  Each of the previous two months were also revised upward, with the December surplus raised to $140.0 million and the November surplus raised to $211.4 million.  As discussed in this blog when the initial estimate was released two weeks ago, it was the first time Mexico's exports had exceeded its imports for three straight months since a string of surpluses from February 1995 to June 1997.  According to the report, from the official statistics agency INEGI, Mexican exports rose 3.7% in January, accelerating from a revised increase of 2.5% in December.  Imports rose 3.3% in January, after a 2.8% gain the previous month.  On an unadjusted basis, Mexican exports in January were up 28.2% from the same month one year earlier, while imports were up 25.0%.

Manufactured goods make up the vast majority of Mexico's merchandise exports, and they were up 25.2% year-over-year in January.  In contrast to 2010, when autos and auto parts had been the main driver of Mexican manufacturing exports, the auto category's growth in January was slightly weaker than the non-auto categories.  The major manufacturing categories showing the strongest export growth were food and beverages, steel and metals, and industrial equipment.  Crude oil and other petroleum products are the second-most important category of Mexican exports, and they surged 40.8% year-over-year in January.  On a volume basis, Mexican crude oil exports totaled 1.444 million barrels per day, up 22.8% from January 2010.  On a value basis, the average export price for Mexican crude oil rose to $84.71 per barrel, up 17.3% from one year earlier.  Finally, Mexican agriculture exports in January were up a strong 30.2% year-over-year.  Among the agricultural products showing the best gains, foreign sales of onions and garlic were up 89.3% year-over-year, while fish and shellfish were up 66.6% and strawberries were up 58.6%.  Perhaps the most notable decline was in the coffee category.  Foreign sales of Mexican coffee were down 37.1% year-over-year in January, which press reports attribute primarily to cold, rainy weather.

Comment:  Mexico's three-month string of seasonally-adjusted trade surpluses shows just how well its international sector is performing.  Moreover, with economic growth accelerating in the United States, it looks like the trade sector will continue to outperform in the coming months.  Just as important, Mexican export growth has recently been well-balanced, which should make the export boom more resilient in the near term.  The two main risks are that the strong peso could eventually weigh on sales abroad, while political tensions in the Arab world could undermine confidence and put a damper on global demand.

Patrick Fearon, CFA
Vice President, Fund Management

       Mexico's Merchandise Trade Balance
            Seasonally Adjusted, Million US$
                           Source:  INEGI
Exports 1101 Revised

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