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UPDATE 1-Argentina 2002 trade surplus balloons

By Athena Jones

BUENOS AIRES, Argentina, Jan 31 (Reuters) - Argentina's trade surplus more than doubled to a record $16.4 billion in 2002 after a messy peso devaluation in January slashed imports, the Economy Ministry said on Friday.

Exports, which the government hopes will drive a recovery from the country's worst-ever crisis, also fell, by 5 percent, during the year as firms faced a credit crunch brought on by a massive debt default in January.

But while Argentina's exports, which became more competitive after the devaluation but suffered from a lack of financing, fell to $25.3 billion, imports fared even worse and slid 56 percent to $8.9 billion.

The drop in imports, which became more expensive after the devaluation, pushed Argentina's trade surplus for 2002 up to $16.4 billion from a surplus of $6.3 billion in 2001. The peso fell 70 percent against the dollar during the year .

"The disorganization of the devaluation made it very hard for companies to produce. Most importantly there was no financing, absolutely none," said Camilo Tiscornia, an economist at the Estudio Ferreres consultancy.

Argentina posted a trade surplus of $1.2 billion in December, compared with $1 billion the year earlier.

Tiscornia forecast overall exports would rise to $27 billion in 2003, but much would depend on a return of credit.

"Argentina is cheap, without a doubt, so it can export a lot. But local conditions still aren't great for firms to start producing and many still have financial problems," he said.

Imports are also seen rising this year as the economy slowly recovers, said Tiscornia, who forecasts imports at $10.2 billion in 2003, still far from levels reached in 1997 or 1998 when the country was importing some $3 billion per month.

BRAZIL GROWTH, FARM SECTOR BOOM

A key factor in boosting exports is growth and stability in Argentina's main trading partner Brazil, whose own economy was rocked last year by pre-election jitters that battered both the currency and stock market, economists and firms said.

Brazil, is the main market for companies like Ford Motor Co.'s unit which sees its overall exports rising this year from $450 million worth of autos and auto parts in 2002.

Ford exported about 37,600 vehicles in 2002, said Ceretti, who expects that number to grow by 15 percent in 2003 and said the devaluation was helping the firm break into new markets.

"We started shipping to Venezuela in November but had bad luck and the units we sent are being sent back because of the strike," Ford Argentina spokesman Rodolfo Ceretti said.

Ford Argentina exports to Mexico, Chile, Central America, Bolivia, Uruguay, Paraguay and Bolivia and wants to begin shipping to the United States and Canada, Ceretti said.

Argentina is a top exporter of soy, beef, lemons, honey; and farm goods make up about half of total exports.

The country expects to produce a record soy crop of 34 million tonnes and the U.S. Department of Agriculture expects Argentine soy exports to jump about 60 percent to 9.7 million tonnes and sees soybean and soymeal exports also rising.

Other farm-related exports are also seen rising.

"Right now we are exporting to several countries like Cuba, the United States, Brazil, Chile and Paraguay," said Agropecuario Bolivar owner Alejandro Olivera, whose firm imports and exports farm machinery and who expects exports to rise 15 percent this year.

Olivera does not see a similar increase in the firm's imports: "Imports are completely paralyzed."