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Argentina: Complicated season for garlic
Guillermo San Martin, the general manager of the Association of Producers and Exporters of Garlic, spoke about the situation in the province of Mendoza, which has a complicated forecast as the end of the harvest draws near.
According to San Martin, it hasn't been a good season for producers of the Asian varieties, as they have lost a lot of garlic, especially of the Asian purple variety. "There was an oversupply both locally and in Brazil, therefore producers were unable to export what they were saving, much of which sprouted," he said.
Regarding the red garlic variety, which is expected to end in August, the representative said that it was loading very slowly and that unfortunately international prices are depressed because of the good performance of China and the record production in Mendoza, Brazil, and Spain. This means that there is an oversupply in the markets, which puts more pressure on prices.
He also said that, even though the exchange rate had brought a timely relief, it won't be a competitive advantage in the medium term because "other production costs are quickly adjusted, such as inputs, fuel and the price of electric power, which lost its subsidy, especially for agricultural irrigation. That also puts a lot of pressure on updating labor costs."
The current season is also complicated due to the producer's financing situation and the increased costs they will face towards the end of the season. "We must get ready for another complicated season, with the same levels of supply and international prices, or even worse, fearing that this financing situation will lead to problems of quality in Mendoza's production."
Despite this, he acknowledged that "Brazil has renewed its garlic's tariff position, which means that we are going to continue in Mercosur mainly with a 35% import tax, a protection barrier against garlic that comes from Spain and China."
He also said that the prospects for exports to Europe had improved a little because Spain had a lot of rainfall in the last stage of cultivation prior to the harvest, which affected almost 7 thousand hectares. "That could help us a little. In addition the American market is still interesting and the Colombian market was recently opened. In any case, these four markets don't stack up to the Brazilian market, which is still our main destination."
Publication date: 7/11/2018
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