Investment In Industrial Equipment Falls In Uruguay

Investment in machinery and industrial equipment fell 11.3% during the first trimester of 2015 compared with the same period in 2014 according to a report by Uruguay’s Chamber of Industry.

Among imported capital goods the report highlighted decreases in packing machines, roasting ovens for metallurgy and boilers.

“This behavior is in large part aligned with the poor performance of industrial exports [from Uruguay] which has been dragging for some trimesters and worsened at the start of this year” reported Uruguay’s Chamber of Industry.

The Uruguayan sector which showed the greatest increase in investment was food, tobacco, and alcohol where investment increased 87.9% compared the previous year. Excluding this sector Uruguay’s investment fell 24.8%.

The sector’s increased investment came mostly from companies in the milk and beverage sub-sector. Lower than usual levels of investment in this sub-sector during 2014 explains the dramatic increase.

This Uruguayan Business Brief is a summarized translation of a news article that appeared in the Uruguayan newspaper El Observador. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry. For more resources on Uruguayan Business visit the Uruguay Business Reports Store.

Uruguay’s Nueva Palmira port saw 43% increase in cargo moved during the first seven months of 2013

Port of Nueva Palmira (Photo from Uruguay’s National Port Administration

The head of the Nueva Palmira Port, Flavio Vaccarezza reported that from January to July the port moved 2,000,000 tons compared to 1,400,000 tons during the same period in 2012, a 43% increase.

Vaccarezza said that the port recently added a 200 meter mooring front. He explained that it is a “riverside quay which allows us to attend to a higher number of barges and, as a consequence, to satisfy the growth in demand for services that accounts for the increase in tonnage moved”.

The port also recently added an additional 22,500 square meters for merchandise storage which also allows it to receive more ships.

This Uruguayan Business Reports news article is a summarized translation of a news article written that appeared in the Uruguayan newspaper Ultimas Noticias. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.

Uruguay and United States sign an agreement to modernize customs procedures

Uruguay’s Economy Minister Fernando Lorenzo and United States Under Secretary Francisco Sánchez signing the customs agreement

Francisco Sánchez, U.S. Under Secretary of Commerce for international trade, met with Uruguayan President Jose Mujica to sign an agreement to improve the systems used by customs and border control.

Diego Cánepa, Uruguay’s Presidential prosecretary, said in the press conference following the signing that the agreement aims to solve “practical and technical problems” in the customs and border control systems.

“Many times there are agreements, but when they are put into practice practical problems arise” those old problems Cánepa explained will be corrected by this new agreement.

Sánchez said that President Mujica talked about the “importance of finding ways to lower trade barriers” and explained that the agreement “is one way” of doing that and “improving the system”.

Sánchez went on to say “We are talking about how to improve trade, not only between Uruguay and the United States, but regionally .. and of the need to use all the mechanisms, including Mercosur, to have more trade based in the agreements and the treaties and the systems that exist”.

Cánepa reported that although President Mujica’s visit to Washington to meet with President Obama, has been confirmed, the date still has not been decided. The trip will be take place sometime in the “next few weeks”.

This Uruguayan Business Reports news article is a translation of a news article that appeared in the Uruguayan newspaper El Pais. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.

The Uruguayan peso falls to its lowest value against the dollar in four years

On August 22, 2013 Uruguay’s exchange rate hit 22.43 UYU to the dollar, the lowest the Uruguayan peso has been against the dollar in almost four years.

The dollar rose 1.84% against the Uruguayan peso on August 22, after having already risen 1.97% on Wednesday. Wednesday’s increase was the  biggest single day increase in nearly three months.

Uruguay’s vice-president, Danilo Astori commented yesterday in the Uruguayan city of Mercedes that “there is no reason to expect a drop in the dollar for the rest of the year”.

Yesterday, the average interbank exchange rate was 22.43 UYU to the dollar, the lowest the Uruguayan peso has been since September 2, 2009.

This Uruguayan Business Reports news article is a translation of a news article that appeared in the Uruguayan newspaper El Pais. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.

Uruguay News Brief: Uruguay’s exports fell while imports rose in July

Uruguay’s exports fell 2.3% in July 2013 compared to the year before, for a total of $1.029 billion USD reported the Uruguay XXI Institute, Uruguay’s export promotion agency. Imports rose 14.3% in July over last year to reach $841 million USD.

Uruguay’s exports have increased 4.5% this year, up $5.6 billion. Imports, excluding petrochemicals have increased by $5.3 billion USD.

This Uruguayan Business Reports news brief is a translation of a news article that appeared in the Uruguayan newspaper El País. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.

Uruguay’s executive branch seeks a permanent ban on importing used cars

In the next few days Uruguay’s executive branch intends to send a bill establishing a “definite prohibition” on importing used vehicles to the parliament.

The upcoming bill is the result of analysis by an interministerial commission (led by the Economy Ministry with representatives from the ministries of Industry, Transportation, Public Works, Housing, and the National Road Safety Unit) created to make a final decision on used car imports. There has been a ban on used car imports into Uruguay since 1959 but it has to be extended every few months.

The commission acknowledged that Uruguayan consumers would benefit from used car imports, however it found concerns about security, environmental standards and harmonization within Mercosur (all members have banned used car imports except Paraguay) outweighed those benefits.

The commission was originally scheduled to announce their findings on May 1. The ban’s last extension, which Uruguay’s parliament approved in 2012, is due to expire on the August 30, 2013.

The new law would end the need for further extensions.

The 1959 decree required the ban be re-approved every six months. In 2005, the law was changed to allow the law to be reauthorized for up to four years.

This Uruguayan Business Reports news article is a translation of a news article that appeared in the Uruguayan newspaper El País. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.

Uruguayan government believes raising mercosur tariff on imports “is not ideal” for Uruguay

The proposal would affect industry and Kreimerman says its “is not ideal” for Uruguay.

The Uruguayan government will study Argentina’s proposal to raise the Common External Tariff (AEC) to 35%, the highest permitted by the WTO , although in principle it considers the proposal “not ideal for Uruguay” due to the impact it will have on industries which use imported components in production.

“Whenever there is a request from one of our [Mercosur] partners we have to analyze it, but we start with the point of view of a small and open country and that point of view considers our we dependence on components which we bring in from abroad. We will be very careful”, the Industry minister, Roberto Kreimerman, told El País.

The proposal will be formally proposed by Argentina June 28th in Mendoza, Argentina at the next meeting of the Mercosur trade block, but it came to light n the press after last week’s meeting between Argentinean foreign secretary Héctor Timerman and his Brazilian counterpart, Antonio Patriota.

Kreimerman, the Uruguayan Industry minister, said he doesn’t know the details of the proposal yet.

“(Uruguay’s position on the proposal) can not go far because we have to see what will be the complete plan” he said. He then added that “in principle it is not ideal” for Uruguay.

In Montevideo, the ministry is working on a report about the possible effects of an increase in the tariff like the one proposed by Argentina

The measure proposed by Argentina seeks to protect Mercosur from the strong flow of European and Southeast Asian products that are arriving in the developing world thanks to the recession.

Mercosur’s average tariff is currently 22%. To raise it to 35% Argentina can count on the support of Brazil and Paraguay, but they need the unanimous approval of the block and for that reason Uruguay’s position is key.

Kreimerman said that when they make the proposal it will be “more specific then what we are talking about now”  therefore it is possible it wouldn’t affect intermediate industrial inputs (which Uruguay imports). Nevertheless, Timmerman’s proposal [to Brazil] did not exclude certain sectors but called for a broad increase in the tariff.

This Uruguay Business Reports news article is a translation of a news story which appeared in the Uruguayan newspaper El País. That article, in spanish, is available here. Uruguay Business Reports translations by Donovan Carberry. 

Uruguayan trade with Argentina fell 9% in the first quarter

Trade flows with Argentina fell 9% in the first quarter of the year, a result of the trade barriers imposed by Cristina Fernández’s government.

In the period between January and April of this year exports of goods to Argentina came in at $160 million USD, $9 million USD less than the same period in 2011. Nevertheless, the Economy undersecretary, Luis Porto, played down the situation.

“Don’t only look at the $9 million USD, look at the $160 million that passed through without a problem”, he said.

Despite the restrictions, exports to the Argentinean market increased 17% in 2011 and reached $590 million USD, the highest amount in history.

The 5.8% reduction in exports in the first quarter, corresponds to the Argentinean policy, shared by Brazil, of defending its industry. In the conference “The  Argentinean Economy and its impact on Uruguay” the undersecretary for Finance and Economy, Luis Porto, explained [the trade barriers] result from over production by Asian manufactures effecting the region as well as the monetary tsunami provided by developed countries,

The Uruguayan government is trying to create a mechanism that considers international trade asymmetries within Mercosur, but for the time being it is increasing the strategy of bilateral negotiations to free exports case by case.

This Uruguay Business Reports news story is a translation of an news article which appeared in Las Ultimas Noticias. That news article, in Spanish, is available here. Uruguay Business Reports translation by Donovan Carberry.

Work on Pier C in the port of Montevideo will be finished in 2013

The work on Pier C in the port of Montevideo which began this April will be finished during 2013. A purpose public pier is being constructed alongside Pier B. According to an announcement by the president of the National Port Administration (ANP), Alberto Díaz, Pier C will have a mooring post 285 meters long which will allow containers ships and bulk carriers with up to 12 meters of draught. “Work officially began in the month of April and we will finish it by the middle of 2013”, confirmed Díaz.

“Pier C will have a 285 meter long new mooring post that will allow container ships and bulk carriers with up to 12 meters of draught. It will also have a four hectare paved surface for the transferring goods and for storage as well as vehicle traffic (…). The work will cost 60 million dollars” reported the “Handbook of Uruguay Commercial Ports 2012-2013” published by the ANP.

Díaz maintains that it is “a project in progress that we have to continue giving a lot of attention so that it keeps moving and that it doesn’t stop. It is intended to be a solution in the short-term”. He added that the ANP aims to complete each planned stage ahead of time and for the contractor to finish the work in the planned 18 month period.

“The fundamental value of this work is that it creates a new mooring post. We have a problem with the number of mooring posts so this is a solution that will permit us to add a public pier and multipurpose area”  he emphasized.

Asked what benefits Pier C’s construction will bring to cruise ships which arrive at the port of Montevideo, Díaz answered that the benefits will be indirect. He explained that the cruise ships will not operate at this pier but will benefit because the new pier will mean more room for their maneuvers. “At the moment you can observe the workshop under construction but there are still are not prefabricated pieces in the area”, he said.

Recently, ANP finished moving more than 34 abandoned boats which they shaped into an island in a distant part of Montevideo port’s operational section. “Now what one sees are buoys and ships, some are doing dredging work, others are performing searches to confirm where there are useful materials (sand)  for proper construction”, said Díaz.

This Uruguay Business Reports news article is a translation of a news story which appeared in Todo Logistica. That news article in Spanish is available here. Uruguay Business Reports news translation by Donovan Carberry.

US dollar passes 20 Uruguayan Pesos and is trading at its strongest against the peso this year

The greenback jumped nearly .54% which put it above $20 Uruguyan pesos in the daily average for the first time since the 29 of last December, in the context of strong momentum buying by some private banks, before the new appreciation of the dolar internationally.

Inter-bank trading yesterday brought the price of a dollar to $20.029 Uruguayan pesos, a total rise of 1.19% in May and of .66% over the year.

For its part the Bank of the Republic increasted the public price of the dollar from $19.75 UP to $20.25 UP.

Exchange agents consulted by El País said that the rise of the dolar in the local market was due exclusively to the rise of the greenback outside the country, principally in Brazil. Worries about the future of Greece in the Euro zone continue to generate uncertainty in the markets.

Local trading at the Electronic Stock Exchange was $13.1 millon, without the intervention of the Central Bank or the Bank of the Republic, which were absent during the slow working day.

This Uruguay Business Reports article is a tranlslation of an story which appeared in the Uruguayan Newspapaer El Pais. The original story in Spanish can be viewed here. Uruguay Business Reports Translation by Donovan Carberry.

El billete verde dio un salto en la víspera de 0,54% que lo llevó a superar los $ 20 en el promedio diario por primera vez desde el 29 de diciembre pasado, en un contexto de un marcado impulso comprador por parte de algunos bancos privados, ante la nueva apreciación del dólar a nivel internacional.

Las compraventas interbancarias de ayer se efectuaron a $ 20,029, con lo que acumula una suba de 1,19% en mayo y de 0,66% en el año.

Por su parte, el Banco República aumentó 10 centésimos la cotización al público hasta $ 19,75 y $ 20,25 cada punta.

Agentes cambiarios consultados por El País explicaron que este ascenso del dólar en el mercado local se debió exclusivamente al fortalecimiento del billete verde en el exterior, principalmente en Brasil. Es que en el mundo las preocupaciones respecto del futuro de Grecia en la zona del euro siguen generando incertidumbre en los mercados.

La operativa local a través de la Bolsa Electrónica de Valores fue de US$ 13,1 millones, sin la intervención del Banco Central ni del República, que se mostraron ausentes en la jornada de baja operativa.