MexECON Blog

July Export Rise Confirmed

Mexico's July merchandise trade deficit was unrevised at a seasonally-adjusted $364.4 million, after deficits of $218.9 million in June and $304.4 million in May.  According to the report, from the official statistics agency INEGI, Mexican exports fell 0.1% in July, following increases of 1.2% in June and 3.0% in May.  Imports grew 0.4%, after increases of 0.9% in June and 3.6% in May.  On an unadjusted basis, Mexican exports in July were up 19.4% from the same month one year earlier, while imports were up 19.2%.

Manufactured goods make up the vast majority of Mexico's merchandise exports.  In July, they were up 16.8% year-over-year.  The major manufacturing categories showing the strongest export growth in July were steel and metals, autos and auto parts, and chemicals.  Crude oil and other petroleum products are the second-most important category of Mexican exports, and they were up 32.2% year-over-year in July.  On a volume basis, Mexican crude oil exports totaled 1.223 million barrels per day, down 11.8% from July 2010.  On a value basis, the average export price of Mexican crude was $104.85 per barrel, up 53.0% from one year earlier.  Finally, Mexican agriculture exports in July were up 10.4% year-over-year.  Coffee exports led the way with an rise of 126.4% year-over-year.  Other agricultural products showing strong gains were fish and shellfish (up 67.1%), miscellaneous fruits (up 37.8%), and tomatoes (up 21.2%).

Comment:  Mexico's trade performance remains strong, but export growth is moderating in response to renewed economic lethargy in key countries around the world.  If the global slowdown continues, Mexican trade performance is likely to soften further.  Mexican exports will probably continue to grow for a while yet, especially now that the peso has retreated in the midst of the global financial panic, but there is an increasing risk that exports will slow more dramatically, and they could eventually start to fall at some point in the coming year.

Patrick Fearon, CFA
Vice President, Fund Management

                Mexico's Merchandise Trade Balance
                    Seasonally Adjusted, Million US$
                                   Source:  INEGI
Exports 1107 Revised

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