Chinese Ban Sign Of Broader Export Woes

BMI View: We see China's blockade of Argentine soybean oil imports as further indication of the destructive nature of the government's interventionist economic policy. While the embargo is unlikely to make too much of a dent in export numbers for the time being, this interventionist stance and a deteriorating global demand outlook implies export growth will continue to lag imports both this year and next. We believe this will prompt the country's trade surplus to shrink from US$18.6bn in 2009 to US$10.0bn in 2011, undermining already fragile investor confidence in Argentina's macroeconomic outlook.

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