• Insights

Macro-economics and how it impacts on HR – Argentina

Import and export will suffer in some ways in Argentina and gain in some others, as a result of the war in Ukraine.

There is a small but steady commercial interaction between Russia and Argentina. In terms of the Russian invasion of Ukraine and its impact in Argentina, exports to Russia consist mainly of fruit and vegetables, dairy (milk and derivatives), meat, vegetable oils and some others. Information received from the Argentina/Russian Chamber of Industry and Commerce reports total interruption to this trade. Small companies in Argentina oriented towards agricultural industrial exports to Russia will be suffering severely, losing jobs and risking bankruptcy. The devaluation of the ruble means that transactions made in that currency will result in severe losses. Other companies relying that export to Russia are Mastellone, Siderca and Aceitera Deheza, but as they have a strong presence in the local market and diversified exports markets, the situation should not affect them severely.

Argentina is a strong player in the production and export of grains. The Stock Chamber of Chicago where contracts for grain are negotiated shows an increase in the price in the order of 40%. This will drive up local prices but also increase exports from Argentina to around two billions US dollars. The other side of the coin is the import of gas, which will increase in both volume and price. The price of BTUs of natural gas has tripled in dollars since the war.

So in terms of exports and imports, Argentina will certainly suffer and will experience energy shortages that could impact industry and subsequently, employment.

In employment terms, businesses are assessing how to reduce their use of gas, what vacation leave can be taken in advance, how shifts can be rearranged, etc.

Eduardo Juan Viñales
Partner - Argentina
Bruchou & Funes de Rioja