Argentina’s citrus export sector is facing strong headwinds due to an ongoing drought and heatwave, a currency crises and 102.5% year-on-year inflation increase in February 2023 that has seen a doubling in prices of most consumer goods.
Despite the Argentinian Government’s declaration of a state of agricultural emergency for the main lemon production province of Tucuman, producers and exporters say the overall citrus harvest is late, sizes of fruit are small with a lot of uncertainty in the air.
Producers and exports say there is so much uncertainty with upcoming national elections too. About 40% of Argentinians are said to be in poverty with meat prices up by almost 20% and basic foodstuffs becoming out of reach for many people. The local currency the Argentinian pesos has a government capped $1 to about 140 pesos, while the so called “blue” market unofficial exchange rate used by citizens is $1 to over 290 pesos. Many prefer to use the US dollar currency as the pesos is losing value daily.
The agricultural state of emergency for Tucumans lemons, as stated on the website of Argentina’s main citrus body FederCitrus, has been instituted for 365 days. It provides tax relief for one year. Factors that led to the declaration are said to be due to the increased citrus production of Uruguay and South Africa.
Argentina’s President Alberto Fernández, at his most recent visit to the US, told the media “Argentina is going through the worst drought on record since 1929, which has very much complicated our economy, and we’re discussing this situation with financial institutions.'' He was visiting US President Joe Biden in the White House to gain his support for IMF debt and loan restructuring.
President Fernández also blamed the effects of the Russian war in Ukraine for contributing to the hardships the country is facing. Argentina has secured bailouts that will eventually be up to $44 billion from the IMF to be paid out over 30 months.
A citrus exporters and producer in Argentina commented: “The citrus campaign is delayed, Argentina is experiencing a drought, inflation, very high costs, all in a year of presidential elections. There are better factors such as more affordable maritime freight prices and less supply to export but it is not enough. There is no communication for the sector press, because there are political changes that can affect us such as the official exchange rate. The declaration of a state of emergency for citrus, and modifications that are being requested are there to motivate producers.”
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