Agrochemical production in Argentina halted due to lack of US Dollars

The Chamber of the Argentine Fertilizer and Agrochemical Industry (CIAFA) stressed that the production of agrochemicals and fertilizers in Argentina has halted, due to a lack of US Dollars in circulation in the country. 

″Currently there are companies with suspended production lines,″ added the entity, which brings together Argentine agri-input industries and warned that the production of inputs will be even more compromised if the Argentine Republic (BCRA) does not change a rule that affects the importation of essential raw materials for the industry.

Recent changes introduced by the BCRA under ″Communication A7622″ in the criteria for the payment of imported inputs make it difficult for dollars to leave the country.

The new measure also limits the possibility of making a payment in cash known as CAD (cash against documents), as well as the deadlines for tax financing, which increased from 60 to 180 days for customs clearance registration.

In addition, the possibility of accessing the foreign exchange market with funds settled as advances or pre-financing exports has been stopped.

This situation affects both local production, i.e. raw materials, and products ready to be used by agricultural producers. 

″If this situation continues, the supply of fertilizers and phytosanitary products will be compromised,″ said the chamber.

SIRA: SOLUTION

In the CIAFA's view, the approval of the Import System of the Argentine Republic (SIRA) will be fundamental to normalizing production.

Imports into Argentina are being delayed, due to issues in the chain without any clear reasons, meaning that products that arrive cannot land at ports or are waiting for approval in tax warehouses.

In addition to these products, there are those in transit or are close to arrival, which still have not been approved.

Regarding agrochemicals, local production depends on the supply of raw materials for the manufacturing of different types of inputs, while considering their suitability for use.

″We consider it necessary and urgent for the SIRA to be approved and the payment terms to be adapted, as a reality that our sector demands. We expect the dialogue we have had with government agencies to translate into the approval of the measure, as has happened on previous occasions, to help achieve greater food production,″ the CIAFA stressed.

″We are in the last part of the year and need inputs for summer crops. If we do not have fertilizers, then for every dollar not invested in them, we will lose several dollars in foreign currency. In addition, the lack of immediate availability of phytosanitary products used to control challenges will result in a significant loss of production and foreign exchange,″ it added.

(Editing by Leonardo Gottems, reporter for AgroPages)