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Argentina Shipping Report Q1 2012
Business Monitor International, Nov 2011, Pages: 131
Business Monitor International's Argentina Shipping Report provides industry professionals and strategists, corporate analysts, shipping associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Argentina's shipping industry.
BMI believes that the Argentine government has artificially propped up growth during recent years. This should continue to support real term expansion over the coming quarters, but BMI believe that this government-led growth is ultimately unsustainable. BMI expect real GDP growth to cool to 4.1% in 2012, down from growth of 7% in 2011.
Private consumption grew 11.3% year-on-year (y-o-y) in Q111 and is set to remain a key driver of economic growth, ensuring demand for imports of containerised goods. However, as BMI have repeatedly noted in recent months, this trend is less reflective of strong economic fundamentals but more the government's continued fiscal support to household incomes. As consumers have little incentive to save because of the nation's soaring inflation - with inflation expectations for June 2011 averaging 32.5%, significantly higher than INDEC's 9.7% May 2011 estimate - this trend is likely to continue supporting growth, boding well for containerised imports in the short term, but further exacerbating the economy's inflationary woes.
Headline Industry Data
- Total volume at the Port of Buenos Aires is set to rise by 4.7% in 2012 to reach 13mn tonnes. Box handling at the same port will also grow by 4.7% to 1.2mn TEUs.
- Further south, the Port of Bahía Blanca will see a 3.2% growth in volume to 14mn tonnes.
- Argentina's foreign trade will grow 5.2% in real terms in 2012.
Key Industry Trends
- ICTSI Looks To LatAm To Boost Volumes
International Container Terminal Services (ICTSI) is continuing to increase its Latin American exposure. Having secured a 30-year lease to operate a terminal at the Argentine port of La Plata, the Philippine terminal operator is reported to be considering a complete takeover of operations at the port. BMI cautions, however, that any attempts to privatise the port would likely meet strong opposition and industrial action from port workers.
Strikes Continue To Present Downside Risk To Port Throughput BMI maintains its view that regular strikes present downside risk to port throughput in Argentina as workers seek pay increases due to soaring inflation. In July 2011, workers at Argentina's food and animal health agency staged a five-day strike, delaying more than 40 grains shipments from one of the world's biggest suppliers of corn, wheat and soy.
- Key Risks To Outlook
Key risks to their outlook are on the downside. BMI maintain their view that Argentina faces strong economic headwinds: soaring inflation, fiscal profligacy and growing government intervention mean the Argentine economy will struggle to sustain its current growth trajectory, as investors become increasingly cautious of the economy.
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