Argentina: Internal problems hamper the entry of citrus fruits to international markets

Argentina's citrus fruits production takes place in two well differentiated scenarios. On one scenario exporters are victorious, as they have opened new markets and are now able to export mandarins to Colombia and oranges to China, and have managed to export lemons from Tucuman to the US market after almost two decades. Meanwhile, the producers of the Northeast (NEA) are going through a rut, as they are being affected by a high tax pressure, withholdings, and high interest rates that complicate their financing.

Even though the entrance of lemons to the North American market was highly anticipated and was the result of diplomatic and commercial efforts that began with the previous Government, the volume exported was lower than expected and stood at 1,769 tons up to May, according to SENASA. The president of the Argentine Federation of Citrus (FEDERCITRUS), Jose Carbonell, said that "we exported small quantities to the US, but they were very well received, and achieved very interesting prices." "We can grow in this market and the impact that being able to export to the US once again has on the image of the lemon from Tucuman will improve our prospects."

According to Argentina's Northeast Citrus Association (ACNOA), the 2018 season was characterized by an increase in volumes, higher quality, and shipments to new destinations. The president of FEDERCITRUS said that this had been one of the most important campaigns in history. Carbonell also highlighted that "China received containers of Argentine orange for the first time in history, which opens a huge perspective as this is a very important market. Just as we expect the orange to enter the US from the hand of lemon, we hope that the lemon enters China and Vietnam from the hand of our sweet citrus fruits."

"There are two separate realities. The reality for lemon producers of the NEA zone is different than the reality of sweet citrus producers from the same area," stated Nicolas Carlino, Counselor of CONINAGRO and member of the Colonia San Francisco Cooperative of Monte Caseros. "Sweet citrus have been declining for five or six years. It's a trend that we haven't been able to reverse. We went from exporting 120,000 tons to 35,000 tons."

Fernando Borgo, the former head and current Treasurer of the Federation of Citrus of Entre Ríos (FECIER), said that "we still can't access those markets due to a lack of competitiveness caused by not modifying the production and marketing costs. The change in the exchange rate, which took place four months ago and was not the product of a monetary plan, helped the sector."

"However, it's impossible to plan an export market under these circumstances," he warned and added: "Nobody knows what will happen next year when we are harvesting the fruit that is blooming in the farms."

Carlino complained about the impact of export duties on his productive equation: "Right now, due to the price of the dollar, withholdings are in the order of 11%, which is the most expensive amount I remember the citrus sector paying." "Another determining factor in the equation cost are the interest rates, which are way too high," he said. "Ten days after loading a container in the port to export it, I have to pay 11% in retentions but, with luck, I'm only paid that fruit 120 days after selling it. Thus, I have to find financing in that time. The situation is becoming more complicated every day. In addition, the internal market is falling. It is not a staple product so people start to leave it aside," he said.


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