Agri-input prices skyrocket in Argentina

Date:08-28-2023

Inflation in the prices of agrochemicals and fertilizers rose sharply after the latest measures taken by the Argentine government.

To prevent the flight of dollars from the country, another tax was implemented on the purchase of foreign currency used to pay for the import of inputs, the so-called Country Tax.

This tax is levied at 7.5% on operations, and although it was initially promised that agricultural inputs would be exempt, in the end, this did not happen.

The result was that the rate hit importers of raw materials for manufacturing insecticides, herbicides, fungicides, and other inputs.

After a few days of upheaval in the market, which paralyzed the supply of this type of product, sales resumed at much higher prices.

The value of some inputs, such as the glyphosate herbicide, reached the producer 20% more expensive.

In addition, there is widespread uncertainty in Argentine agribusiness, since the government has the power to raise the tax from 7.5% to 30% without needing the approval of the National Congress.

Federico Landgraf, Executive Director of CASAFE (Câmara de Sanidade Agropecuária e Fertilizantes), the main concern is ″to know how much the tax will be″.

″Therefore, we urgently need a degree of predictability to be able to close the costs of operations and bring products with a scenario of certainty, and not like today when we have unpredictability, as it is unclear when the tax may be implemented,″ he explained.

According to him, this inflation will be passed on to the producer, as the tax ″is levied on an import operation of a product that will be formulated.″

″It is part of the cost chain of a company that is formulated locally. If there is a transfer, that is decided by each of the companies,″ he explained.

Landgraf points out that the pesticide market is ″a competitive market, a market where the price structure of companies is thought twice, but this affects the costs of companies in the import process.″

"That means that these 7.5% are reaching him today in the profitability of past operations, and of operations that will be paid in up to 180 days," he said in conclusion.

(Editing by Leonardo Gottems, reporter for AgroPages)

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