Mexico Posts March Trade Surplus of $1.57 Billion Laurence Iliff - Dow Jones
go to original April 28, 2012

Mexico posted a surprisingly large trade surplus in March on the strength of manufacturing exports, high prices for crude oil, and less thirst for imported petroleum products, pushing the first-quarter trade surplus to $1.75 billion, the National Statistics Institute reported Friday.

The statistics institute, or Inegi, said the nation racked up a $1.57 billion surplus in March alone, with exports up 3.4% to $32.41 billion and imports up 3.2% to $30.84 billion. The surplus was more than three times the $497 million median estimate of eight economists polled by Dow Jones Newswires. It compared to a $459 million surplus in February and a positive balance of $1.46 billion in March 2011.

The Banorte-Ixe financial group said in a research note that external demand for Mexican manufactured goods was being fueled by a weak peso, but warned of a less-rapid growth in the second quarter on signs that the sector was slowing in the U.S. Because of deep bilateral trade ties, manufacturing in Mexico tends to track U.S. trends in the sector.

"Still, we think that the peso depreciation level that the currency still carries could favor production of these goods," Banorte-Ixe said. "It's quite possible that the manufacturing sector will continue to increase, but at a more moderate pace."

Inegi said manufacturing exports in March rose 3% from the year-ago month to $25.55 billion, led by a 9.2% increase in auto exports to $7.78 billion. Mexico has been registering record highs in auto exports for many months as auto companies ramped up production to take advantage of the nation's free-trade agreements to the north and to the south, along with a competitive cost environment.

Petroleum exports in March rose 1.4% from a year earlier to $5.24 billion as oil monopoly Petroleos Mexicanos, or Pemex, exported 1.284 million barrels a day of crude oil at an average price of $114.62 a barrel. Export volume in March exceeded February's 1.229 million barrels a day, and the average price for export crude oil rose by $3.64 a barrel.

Petroleum imports of fuels such as gasoline grew 8.3% in March versus the year-ago month to $3.54 billion, but the gap between petroleum imports and exports widened significantly compared with February, with Mexico's surplus in petroleum products growing to $1.7 billion from February's $1.2 billion, Inegi said.

Mexico's thirst for imported fuels, which it sells at government-set subsidized prices, helped to drive trade deficits in the second half of 2011 as Pemex's refining capacity couldn't keep up with demand. Pemex refinery upgrades have come on line in recent months, easing record fuel imports registered during much of last year.

In other sectors, mining exports in March grew 24% to $466 million and agriculture exports rose 14% to $1.16 billion.

Inegi said imports of producer goods rose 1.1% to $23.32 billion, and imports of equipment and machinery grew 11% to $3.16 billion. Imports of consumer goods rose 10% to $4.36 billion.

laurence.iliff@dowjones.com

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