More than 5.5 million tons2021 was a record year in fertilizer consumption, consolidating the growth process that began in 2016, when the sowing and harvesting of the two crops that demand the most nutrients took off: wheat and corn.
However, that upward curve is at risk of cutting this year: the lack of dollars suffered by Argentina and that has led the Central Bank and the Government to establish Numerous restrictions to access foreign currency or to authorize importsthreatens to affect the supply of fertilizers, especially for the thick campaign 2022/23.
This was highlighted by the executive directors of the Chamber of the Argentine Fertilizer and Agrochemical Industry (CIAFA), Armando Allinghi; and the Argentine Chamber of Health and Fertilizers (Casafe), Federico Landgraf, within the framework of the virtual conference organized by the Soybean Chain Association (Acsoja).
IMPORTS
The key aspect in the case of fertilizers is that 80% of the volume that is marketed and used in Argentine fields is imported: Last year there were about 4.4 million tons that meant imports for more than US$ 2,000 million.
The obstacle is that the shortage of foreign exchange occurs in the midst of an increase in the international price. The result is that already in the first five months of the year, imported volume fell 12%although the amount increased.
“To be able to bring 4.4 million tons like last year, we need $3.2 billionAllinghi warned.
Namely, US$ 1,000 million moreagain, in the midst of a lack of dollars, although agriculture, which is the sector that needs fertilizers, is doing a record contribution of foreign exchange.
PRODUCTIVE IMPACT
In that sense, the director of CIAFA asked to remember that “for every kilo that we apply, there are 10 more kilos of grains“, in reference to the importance of fertilizers to increase yields and, in the long run, improve exports.
For Allinghi, the Government should make imports more flexible as happened in 2020, when fertilizers had the same priority treatment as medicines when enabling entry from abroad, in the framework of the Covid-19 pandemic.
“The companies point out that the amounts they have authorized to operate are going to end and they have to see how they face the gross campaign. And one issue is financing: we are talking about bringing a ship worth US$40 million, with a term of 120 days. It’s complex,” she said.
Under this scenario, he concluded that “in fertilizers there is uncertainty for the second semesterregarding the supply for the re-fertilization of wheat and coarse crops”.
PHYTOSANITARIES, BETTER
Langraf, for his part, bluntly stated that it is impossible to guarantee that there will be provision of supplies in a timely mannerdue to the restrictions already mentioned.
“We had up to 200 days of delay in approval of a SIMI (Import Monitoring System). There is even a lack of criteria, we do not know why certain products enter and others do not”, stressed the Casafe representative. In any case, he appreciated that there is permanent dialogue with the national authorities.
Landgraf’s dissertation focused rather on the market for phytosanitary -herbicides, insecticides and fungicides-which although it suffers from these inconveniences, presents a better outlook than fertilizersbecause companies are getting financing.
@fedelandgraf @TwitCASAFE #projections2022 #phytosanitary supplies pic.twitter.com/O90zWwnuxp
— ACSOJA 🌱 (@ACSOJA_Arg) June 15, 2022
“The phytosanitary market will be supplied”, mentioned Langraf, although he conditioned it to “it will continue like this if you can access the Single Free Exchange Market (MULC) to fulfill the commitments”. In other words, it will be key that the Central Bank does not impose more restrictions.
Last year, the trade balance of phytosanitary products was negative in US$ 1,700 million and this year that “red” is expected to grow to US$2.5 billion.
However, in line with Allinghi, Landgraf stressed that for every dollar imported in these products, 30 dollars in agro-industrial products were exported that, without phytosanitary products, would have been produced in less quantity and quality.
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