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Why Shoppers From Paraguay Are Flooding Across The Border Into Argentina

Waiting for the bus home
Waiting for the bus home

ASUNCIÓN – Latin Americans are not the type to pass on a bargain, especially if it’s being offered by a neighbor.

This is why Paraguay has been mercilessly milking all it can from the depreciation of the Argentine peso. This can be seen in the exchange rate between the two currencies – but also in the cross-border shopping trips that Paraguayans have been massively indulging in.

Currency exchangers are saying they do not want Argentine pesos, and when they do exchange them, it’s at 8.50 and 10 Pesos to a U.S. dollar, instead of the actual exchange rate of 5.17 pesos to a dollar.

The peso has been losing value for some years now, but the strong downturn began about five or six months ago, according to experts. Last year a peso was worth about 700 Paraguayan guaranis. Today exchangers will only give you around 480 guaranis for a peso. “In the past two years the Argentine peso has depreciated in relation to the Paraguayan guarani and this has favored cross-border trade. People go shopping in Argentina a lot,” says economist Fernando Masi.

This translates into a boom for Argentina’s shopping hubs, such as the city of Clordina in the State of Formosa – 40 kilometers from the Paraguay border – an hour by car.

As per cross border agreements, the limit on goods that can be purchased in Argentina is $150 a month, and it is stipulated that the merchandise should be exclusively for personal or family consumption. But, of course, the largest volume of goods crossing the border does not conform to the agreement, and the border controls turn a blind eye.

Wine and cheese

“There is a high number of Paraguayans going to Clorindo for shopping sprees. Not just people with low-incomes but from all sectors of society. This shows that there is a good capacity for consumption in Paraguay and we have a strong currency in relation to Argentina,” says Pablo Herken, an economic analyst.

In Clorinda, prices are between 30 and 60% cheaper than in Asunción, which makes the trip worth the effort. According to a recent report from daily newspaper ABC, cleaning products and personal hygiene products are half price than they are in Paraguay. It is the same for cheese. Champagne and high-end wines are also between 45 and 60% cheaper. These products are the most sought after by the Paraguayan middle-class shoppers who come every month to do their shopping. “I shop for my family. There are four of us and the trip across is worth it. When I get my paycheck at the end of the month, my husband and I take the bus into Argentina. Most of the time I purchase food items, although sometimes other things as well. I buy washing powder, which is half price over there, detergent and fabric softener,” says Blanca Benavente.

To be able to cross into Argentina, Paraguayans must go through border checks, present travel documents and state the objective of their travel. When they say “to go shopping in Clorinda,” the customs officers let them through. There is such an important flux of visitors that Argentinian businesses are starting to offer delivery services – with shopping bags being delivered to the bus stop at the border.

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