Argentine biodiesel back "fair" in Europe – 02/02/2019

The Trade Committee of the European Union decided last Wednesday to rehabilitate imports of biodiesel from Argentina. The news was enthusiastically received by both the government and the private sector: it represents US $ 1 billion in foreign exchange.

Representatives of the oil industry of our country have vigorously celebrated the trade agreement with "conditions of price and volume satisfactory", which would allow them to quickly export to this destination again. "The Argentine industry is celebrating the approval of the agreement, the only way to achieve a return to export to the European Union," said Luis Zubizarreta, president of the Argentine Chamber of Biofuels (Carbio).

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And when he thought the news was "just, with excellent timing," he recalled the work "for several months to reach a mutually beneficial agreement." In this context, he acknowledged the support and efforts of the Argentine Ministry of Foreign Affairs to reach this agreement.

At the same time, Gustavo Idígoras, president of the Chamber of the Petroleum Industry (CIARA) and former agricultural attaché of the European Union, stressed that the vote in Brussels of most of the countries of this bloc is the result of complicated diplomatic work, with long negotiations, which, we hope, would ultimately be successful ".

In practice, the decision to conclude negotiations and implement a price and volume agreement in February has been endorsed. It will include a quarterly update formula based on an FOB price calculation plus fees. In addition, a maximum annual volume will be established, which, in the sector considered, seems to them to be reasonable in relation to the quantities exported in previous years.

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The European Union had introduced anti-dumping duties in 2013, which had been challenged by the Argentine government in the WTO, just as CARBIO and its companies had appeared before the European Court of Justice. Both cases were favorable for Argentina and the anti-dumping duty was removed. At the same time, the EC has opened an investigation into subsidies granted to national and provincial governments that have not yet been finalized. This investigation is considered unjustified and arbitrary, but the EC intends to establish rights that would be suspended from application once the agreement with CARBIO is implemented on Wednesday.

USD 1,756 million in foreign exchange for wheat and barley

The sector's currency depreciation rose 69% between December and January; wheat and barley exports, which have just completed a record harvest of 24 million tonnes.

In January, the companies that make up the Chamber of the Petroleum Industry of the Argentine Republic (CIARA) and the Center for Exporters of Cereals (CEC) liquidated US $ 1,755 million, while the amount paid out the month previous price was $ 1,040. The sources of these entities, which account for a third of Argentina's exports, explained that "the increase in settlement in foreign currencies is fundamentally linked to the purchase of wheat and barley for The purchases already committed for this campaign – the foreign exchange earnings are made between 30 and 90 days in advance – account for more than 8.4 million tonnes of wheat, 600 000 tonnes of wheat. barley and more than 1.3 million tonnes of barley forage "

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However, due to the lower amount of soybeans traded last month, due to last year's drought that reduced the volume of oilseeds, liquidation was lower than in the same period of 2018; in January, it was $ 1,879 million, or 6.5% more than that period.

Then, the numbers can be read in another way: despite the significant reduction in the 2017-2018 soybean season, the good winter cereal production almost offset this reduction when it took liquidate currencies for exports.