Lack of foreign exchange pauses agrochemical production in Argentina

Nov, 22, 2022 Posted by Gabriel Malheiros

Week 202247

The production of agrochemicals and fertilizers is paralyzed in Argentina due to the lack of dollars in circulation in the country, warned the fertilizer industry association CIAFA. “There are currently companies with suspended production lines,” warned the group that brings together industries in the sector.

According to them, the production of crop-enhancing inputs could grow more compromised if the Central Bank of Argentina (BCRA) does not modify a rule that affects the importation of essential raw materials for the industry. Recent changes introduced by the BCRA on paying for imported inputs make it difficult for dollars to leave the country.

The new measure limited the possibility of paying for imports in cash. It also altered the deadlines for receiving tax financing, which went from 60 to 180 days from the registration of customs clearance.

In addition, the new regulation nullified the possibility of accessing the foreign exchange market with liquidated funds as advance payments or pre-financing. This situation affects products affected locally, raw materials, and the ones that enter the market ready for use.

“If this situation continues, the supply of fertilizers and phytosanitary products will be compromised,” said CIAFA representatives.

SIRA is the solution

In the view of CIAFA, the approval of the SIRA (Import System of the Argentine Republic) will be essential to normalize production. According to the industry association, there are practically no coming into imports into Argentina due to circuit delays that arose for no clear reason.

This situation has created the inconvenience of products arriving at the country’s port but not being allowed to enter the country. Instead, they are redirected to bonded warehouses. On top of these products, many stuck in transit still did not receive the necessary legal clearance.

In the case of agrochemicals, local production depends on the availability of raw materials to produce various crop inputs.

“We believe that approving the SIRA and adapting the payment terms to the realities of our industry is both necessary and urgent. The expectation is that the dialogue we maintain with government agencies will shortly lead to the adaptation of the measure, as has happened previously, to boost food production,” CIAFA emphasizes.

“We are nearing the end of the year, and we still need to receive inputs for summer crops; if we don’t have fertilizers, we will lose several dollars in foreign currency for every dollar not invested in them.” Furthermore, the Chamber concludes, “the non-availability of phytosanitary products to control adversities will result in a significant loss of production and foreign exchange.”

Source: Agrolink

To read the full original article, please go to: https://www.agrolink.com.br/noticias/producao-de-agroquimicos-paralisada-na-argentina_473117.html

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