How Russia’s War on Ukraine Could Upset Argentina’s Trade Balance

Argentina had a trade surplus with both countries in 2021, but the war could stymie the exchange of goods

Russia's invasion of Ukraine is already affecting trade with the rest of the world. Photographer: Christopher Occhicone/Bloomberg
March 04, 2022 | 02:40 PM

Buenos Aires — In addition to the humanitarian crisis caused by Russia’s invasion of Ukraine, the war will have a series of economic and commercial consequences on the world, including on Argentina.

On the one hand, there is the increase in commodity prices, since Ukraine and Russia are two leading producers and food suppliers in the Black Sea region, and on the other hand the increase in oil and gas prices, due to Russia’s predominant role as a producer and exporter of both resources.

Argentina could seize the chance to supply markets normally supplied by Russia and Ukraine, with products such as wheat, sunflower oil and barley, although Argentina has already met 90% of its export quota in the case of wheat.

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And a similar opportunity and scenario occurs with oil, as Argentina’s crude oil export margin is minimal.

But there could also be adverse effects for the Argentine economy.

The increase in the price of LNG will be a challenge for the country in view of the approaching southern hemisphere winter, and the higher prices at which it will have to import the fuel to guarantee supply.


According to Marcelo Elizondo, a global economic analyst, this is the most serious problem Argentina will face.

“The increase in gas and oil prices will mean Argentina’s gas import prices will be tripled. I see a more serious problem on this side. You have $3 billion in energy payments at stake,” Elizondo told Bloomberg Línea in an interview.

Trade With Russia

Russia is far from being one of Argentina’s main economic partners, but it is still an important market for the South American country. In 2021, trade exchange was $1.33 billion, with a trade balance in favor of Argentina of $29 million. With Argentina’s need for its Central Bank to accumulate foreign currency, the country cannot afford to lose ground in any market, including the Russian one.

As regards imports, Russia is the main global supplier of fertilizers, exporting close to 35 million tons annually for some $8.1 billion, according to data from the Rosario Stock Exchange (BCR). And Russia is the fifth largest supplier of fertilizers to Argentina, accounting for 7% of the total, with its leading markets being Morocco, the United States and China.


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According to a BCR report, “not having the appropriate volume of fertilizers on time will cost the country between $3.3 billion and $4.5 billion, in terms of lower potential exports of wheat and corn”.

“Trade will be affected, because Russia will have difficulty trading due to Russia’s removal from the SWIFT banking system. There will be difficulty both to sell and to buy. That will generate an operational problem even in imports,” Elizondo points out.


However, he adds that neither the Russian nor the Ukrainian market are “very significant markets for Argentina”, while the Russian market “accounts for $700 million in sales and about $600 million in purchases, which is less than 1% of Argentina’s international trade”.

  • Argentina’s principal exports to Russia: Butter ($54.43 million), shelled peanuts ($52.11 million), and fresh pears ($42.55 million).
  • Argentina’s main imports from Russia: Vaccines for human medicines ($171.54 million), mono ammonium phosphate ($106.31 million), and ammonium hydrogen orthophosphate ($52.65 million).
  • Key fact: In January 2021, the trade balance with Russia was US$48.81 million, while in 2022, the monthly amount grew to US$108.81 million.

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Trade With Ukraine

Argentina’s trade relationship with Ukraine is more limited, but in which Argentina also enjoys a surplus. According to statistics bureau INDEC’s data, in 2021 the bilateral trade exchange was $61.58 million, with a positive trade balance of $20 million for Argentina.

  • Argentina’s principal exports to Ukraine: Frozen hake excluding fillets (US$7.87 million), hake fillets (US$5.47 million) and lemons (US$4.19 million).
  • Argentina’s principal imports from Ukraine: Ferro-silica-manganese (US$5.83 million), mixtures of urea with ammonium nitrate in aqueous solution (US$3.49 million), and electrothermal devices for coffee or tea preparation (US$2.06 million).
  • Key fact: In January 2021, the trade balance with Ukraine was $1.83 million, while in January 2022 it grew to $3.08 million.

Translated from the Spanish by Adam Critchley

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