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Argentina: Garlic: Crisis in the sector or cyclical behavior?

For entrepreneurs, the lean 2011-12 season influenced the decline of over 40% in crops and will affect jobs for the 2012-13 cycle. For experts and workers, it is normal process for this activity.

As a result of the terrible 2011-12 season, there was a decline in foreign exchange earnings by nearly 50% and the cultivated area for vegetables where Mendoza gets most of its products for export came down by more than 40%, going from almost 16,000 hectares (15,914) in the previous season, to 8,526 for the start of the new 2012-13 season..

This is confirmed by the Provincial Horticultural Survey prepared by the Rural Development Institute (RDI), and the main reason, according to the vision of the players involved, is the lack of appeal that this economic activity represents for
investors.

Clearly, if you see the evolution of crops in the last decade a cyclical behavior is evident. As years pass more hectares are created, which usually happens after a good season, and periods of marked decline, results of unsuitable periods.

This time the sector is affected by an international crisis that has battered its competitiveness, but has also jeopardized its profitability due to a sharp drop in the price, local measures and the undervaluation of the dollar. This last one, according to exporters hurt increasingly the cost structure, especially
because the input values keep up the pace with inflation.

But for workers and specialists in this crop, the crisis is wrapped in a particular situation that fits with normal market behavior, with only partial drawbacks, which will meet recovery if tasks as reinvestment and proper routing of marketing are done.

More information: Los Andes


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