Guillermo San Martin, the general manager of the Association of Producers, Packers and Exporters of Garlic, Onions and Related Products of Mendoza, spoke about the producers' reality and how the arrival of Jair Bolsonaro to power in Brazil, which is the main destination for this product from Mendoza, could affect them.
Different productive sectors in the province are closely following what happens in Brazil after the assumption of the new president. The announcements about possible modifications to Mercosur generate hope in some areas and fear in others.
"While the Mercosur may take different nuances, the institutional framework will be maintained. We are concerned that the Chinese production enters the market without some form of protection, all markets impose anti-dumping tariffs. In addition, Brazil has an important national production and our peers work hard to take care of local production. We don't think the garlic sector will be affected by the changes in Brazil."
San Martin also said that the sector depended a lot on electric energy for agricultural irrigation. "The devaluation has allowed us to gain some competitiveness but the international price is so low that it's still going to be a bad season. We continue working to maintain markets and because the production has to come out."
Then he spoke about the withholdings. "Imposing a 4 peso withholding on garlic is insane. The people to decide this in Buenos Aires don't know the reality of the regional economies. These products have an added value, garlic undergoes a packaging process that requires a lot of manpower," he stated. Hopefully, the national government will modify this situation in the next few months, he added.
China devotes 600 to 700 thousand hectares to produce garlic each year, Argentina 10 thousand. When China has surpluses it sends them to the foreign market, at least 100 or 150 thousand hectares of production, which lowers the price by half. "They are the ones who impose prices; they sell their products at a third of our production costs."