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Argentina: Brazil's tariffs on Chinese garlic increase

Garlic producers from Mendoza, Argentina, feel relieved. A few days ago, Brazil introduced new tariffs for Chinese garlic and stricter anti-dumping measures. The news gave some hope to the already concerned local market, and although still weary, the province's growers affirm that this puts them in a better position to negotiate.

The announcement was made a week ago by the minister of Agroindustry, Marcelo Barg, during a meeting with producers from the Uco Valley, the largest producing area in Mendoza. "This is good news after so many problems," stated the leader, in reference to the frosts. "We have just been informed that Brazil introduced new tariffs on Chinese garlic, increasing them from 0.52 to 0.75 dollars per kilo."

Asocam, the chamber agglutinating all garlic exporters, preferred to be cautious and not make any statements. In any case, they confirmed that the tariff for the Chinese produce would increase from 5.20 dollars to 7.80 dollars; almost 50% more.

The province's garlic growers were concerned about the possibility of Brazil removing the tariff altogether, as it had to be renovated this month, but the neighbouring country, responding to the demands of their own producers, took the aforementioned measure.

This will help Argentinian producers to compete in better terms with China, which is currently the world's largest producer, and although China offers a lower quality product, it is sold at much lower prices, even lower than Brazil's.

Mendoza exports 75% of its production to the Brazilian market, which is why this measure is so important. It is worth noting that the sector is currently going through a crisis, as due to the uncertainty in the international markets, the province's acreage has been reduced to the lowest level in 17 years.

Of the 15,876 hectares in 2011, only around 8,000 remain this season, according to the Rural Development Institute. And this trend continues. According to data provided by Asocam, the current acreage is of just 7,500 hectares; 1,000 less than in the 2012/2013 season.

"We are fully dependent on Brazil. If the dumping measures were not introduced, we would have sold no garlic this year," stated Gabriel Martín, a grower from Tupungato. The entrepreneur, however, affirmed that despite the tariffs on Chinese garlic, the market for it continues to grow in the neighbouring country. The problem is that while Mendoza keeps losing acreage, China increased its production by 35% this year, with a 10% growth in the acreage.

Data from the Ministry of Agroindustry reveals that, despite the 6% drop in garlic exports to Brazil (compared to the January to June period in 2012), the season's prospects are good. According to the Government, "the profitability increased by 43%," and this helps ameliorate the situation. This is based on the fact that, in 2012, 59,438 tonnes were shipped with a value of 76 million dollars, while this year 55,838 tonnes were shipped valued at 109 million. 


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