Romain Corneille, CEO of San Miguel: "The competitiveness gained with the devaluation has been lost"

In a few weeks, the Argentine citrus sector will begin its 2019 campaign. After 17 years of production growth and reopening of the American lemon market, it is planned to improve the quality of the fruit.
increase exports. However, for Romain Corneille, CEO of San Miguel, one of the leading companies in the segment, the macroeconomic scenario presents its complications.

"The competitiveness gained through the devaluation has been lost," said the businessman, citing the exchange rate appreciation in recent weeks, which has combined with a new export withholding and export abatement regime, calling it a "short-term measure". However, he considers that the horizon is positive for the sector, which can grow both in Asia and the United States.

-What is your vision of the macroeconomic situation?

– A comprehensive structure of withholding and elimination of export refunds was defined when the dollar broke the $ 41 mark at the end of September and today stands at $ 38, with inflation exceeding 47%. When mathematics is over, we can say today that the difference is negative. With the $ 4 to be paid per dollar exported, the competitiveness that had been gained with the devaluation has been lost, and when the season begins in the coming months, our situation will be worse than last year.

– How does the dollar impact today?

-I am categorical and I do not believe that the exchange rate is our business, because it is a variable that is not within our reach. If it is high or low, we do not manage it, but when I hear it, they say that there is a competitive dollar. I do not know what they call competitive. What we need to see is whether we have activities that are supported or not with this type of change. Nor do I claim that the dollar should be $ 50 because it makes no sense. But we must recognize that the measures that were taken were rather short-term and had not been thought about in the development of the activity.

-And in terms of internal logistics?

-C is always a problem. The public sector and the private sector need to sit down at a table with transport representatives and producers to understand the reality. I do not pretend that the variable of adjustment concerns people, but we can not live with unrealities. If you set wages without comparison with the rest of the world, we are excluded in the long run.

-What is the projection for the 2019 campaign?

-The production will be quite similar to that of 2018, which was crazy in volume and exceeded 1.8 million tons. The grind was record and there was a fruit supply all year round. This can be a price problem. On the other hand, rain and wet weather can affect the quality of the fruit. The yields will be lower than they are usually, and we will have to focus on the health part. It is important not to play or take risks with the quality of the exported product.

– The US market reopened after 17 years last year. What was the impact?

-The thing that has helped the most is that he has raised the staff in the area. The activity was supposed to
adapt to more stringent parameters and more complicated protocols, allowing the entire industry to improve in product and quality. Now, there are better fruits and a more exportable volume, which will facilitate the opening of new markets. If you work in this direction, there is a positive future horizon, while in the short term you have to face the current conditions.

– What are the expectations for this destination for 2019?

-It will improve the volume sent, because everyone who works with this market have made adjustments around the preselection line, packaging and other problems according to the parameters defined by the protocol. The market was reopened last year and 7,000 tons were exported, while it was initially estimated at 20,000 tons. This year, the sales window is wider, beyond 12 weeks, depending on weather conditions, which means that we can estimate 30,000 tons. This is an important market figure.

-How do you badyze the evolution of the domestic market? How does this affect your sector?

-The volume of the domestic market is unknown. In Tucumán, we live by constantly increasing the number of flights in the area, and all this volume is mainly for the domestic market. It is a systematic risk and a parallel activity has been generated. And there is another risk much more important than health, as in the case of HLB. In this sector, health is essential and requires both the private sector and governments.

– In addition to the USA? and in Europe, what other destinations can Argentina aim for?

-We must look carefully at Brazil, which is open to our production. They consume a lot of lime, but there is also room for lemon. India and China should be open. Last year, we started exporting fruits via the Pacific via Chile, which significantly reduces the number of transit days to these markets. From Buenos Aires, there are 60 days and by this way, there are 25. With this possibility, exporting to Asia begins to make sense.

-To reach China, the protocol allowing trade has not yet been approved. Is it viable?

-It was not yet an agreement. Today there is a protocol that we can not fulfill. A minimum temperature is set to keep the fruit and lemon in these conditions does not happen.