Argentina owes Brazil footwear debt

The debt of Argentine buyers to the Brazilian footwear industry is estimated at around US$30 million, a value estimated on data provided by Abicalçados on Brazilian exports to Argentina which, according to market sources, practically suspended its purchases and its payments in October 2001. The greatest impact is being felt in Brazil's southernmost state of Rio Grande do Sul, which is responsible for more than 80% of the country's exports. The majority of shipments to Argentina are sold with financing terms of 60-90 days. But as a result of currency fluctuations, Argentine importers started to reduce their orders and even cancel some purchases. In October, Brazil's footwear industry sold nearly US$17 million to Argentina (incidentally the best month of the year), while in November, exports had fallen to US$10 million and in December, just US$7 million. As a result, Brazilian footwear exporters are planning to submit data on Argentina's debts to the sector of the foreign trade department (Secex) in Brasília. These debts are expected to be incorporated in the Mercosur's new reciprocal credit agreement (CCR) established late last year to stimulate exports and allow Brazil to receive what it is owed from Argentina. 'The Argentine buying market will not close, it will not stop. And Brazil is a fundamental partner in the supply of the Argentine footwear market', said Brazil's footwear industry association (Abicalçados) president Élcio Jacometi.