Logistics costs diminish the competitiveness of Argentina's onions

Argentine onions have approximately 1.5% of the world market share. They are mainly produced in the Colorado River Valley, which produces more than 50% of the onions that are consumed in the country and more than 80% of the onions that Argentina exports.

One of the players in this industry in Argentina is ProArco Patagonia SA, a company that was created in 2002 and is located in the area of Villalonga, 200 kilometers south of Bahia Blanca. They registered as exporters and always thought Brazil was a great consumer of their product. In their first year, they shipped 11 trucks to Brazil. The second year, they exported 86 trucks, and by the third year, they had become a joint-stock company and sent over 200 trucks abroad.

"The first years, we started buying production and exporting. Then, we opened our own shed to avoid the breaches of other producers and to keep growing. In 2008 we started to produce ourselves what we exported, "stated Pablo Rios, the company's CEO. The company covers all marketing areas, both locally and in the south of the country. "Exporting onions is not an easy task. Currently, our main problem is a logistical issue, as everything has to be transported by land and sea," Rios stated.

In 2019, ProArco Patagonia SA's onion exports totaled 4,800,000 dollars. So far this year they have exported 1,800,000 dollars and they expect to surpass the value they achieved in 2019. The company sends 40% of its production to Brazil, Chile, and Uruguay.

"We used to have a lot of work with Europe, but unfortunately we've lost that market because our economy is messy and because of union and port policy issues. Our country's transport prices make us less competitive than the rest of the world, not to mention union conflicts..."

The Netherlands, the main producer and exporter of onions in the world, ships the product to 160 countries, Rios stated. "The final product has a very low price because they have already solved everything, from genetics to production, technology, and logistics. For example, sending a truck loaded with onions from Argentina to Sao Paulo costs $ 4,000, but shipping that same amount from the Netherlands costs $ 1,000," he said. The reality is that, despite being farther away, Brazil, Uruguay, and the rest of the Mercosur countries often choose to buy Dutch onions shipped by sea because it costs less than the onions that Argentina ships in trucks.

 

Source: lanacion.com.ar 


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