Blueberries: "We are seeing a very big discouragement in several producers"
The harvest season is approaching for cranberry, one of the fruits that stands out in the fruit sector of Entre Ríos. But the economic ups and downs and the difficulties to face the costs of production and export, cause that the uncertainty reigns in the atmosphere. "This year we have the challenge of seeking revenge. The companies on the one hand are very committed, some with financial difficulties, others have not been able to make the necessary investments and pruning. We are in a bad environment for business, but we are all trying to get to the season with fruit and the best quality and be able to compete with a demanding market such as Peru, "said Adolfo Storni, treasurer of the Argentine Committee of Cranberries (ABC) and president of the company Extraberries SA, in an interview with this medium.
For Storni, who is also a member of the Association of Cranberry Producers of the Mesopotamia Argentina (Apama), the expectation in view of this year's harvest, which is expected between September and December, will be to bet on an export floor of 12 million kilos (12 thousand tons), which "is considerably less than last year and previous years. We are seeing a very large discouragement in several producers and many people are falling by the wayside and no solution has been given. That's why we ask the officials to attend to our requests, but so far we have not achieved it. "
At present, the producing companies that are nucleated in the Apama are at least 30, the majority of Entre Ríos and Corrientes. While around 15 they have the possibility to export. "It is a significant number of companies, stable and seasonal employees, is a demanding sector of labor and generator of foreign exchange. Today we see that it runs serious risks of disappearing, "said Storni.
Among some of the complications in the sector, the treasurer of ABC explained that competition with Peruvian production exacerbates the situation. So much so that from Peru estimate that in three weeks of export would reach "the same amount as us throughout the season. They are going to exceed the 100 thousand tons and in Argentina we are seeing if we can reach at least the 12 thousand tons and that has us very worried, "Storni warned.
How was last year for the sector?
-In general, the blueberry industry of Concordia, as in the other important sectors of the country such as the NOA and the province of Buenos Aires, ended the activity last year hard hit by some changes in the rules of the game, as they were the retentions and the reduction of the reimbursements, as well as problems with the climate since the rains in the northwest and the hail in Concordia reduced production and quality.
This 2019 is a rare weather year because we had few cold days so far. At this stage of the year we would have to have 100 cold hours and we are far below. And this implies the modification in the harvest season and the concentration that we could have.
-What policies do you need to counteract this crisis?
-The sector is trying to get some benefit or help, not give us but not kill us, because many of the measures announced by the government later do not arrive because they have a partial implementation. We have three very specific orders: the non-taxable minimum for the harvest and packaging contractors; the elimination of withholdings; and return to the previous aliquots of refunds.
We ask this to give a bit of oxygen to the activity because all that is the financing of exports and working capital, today is very expensive and in pesos it is impossible because there is no financing in pesos below the 60% and those that are in dollars they are reduced and not all companies can access.
-With these requests, what benefits would the sector achieve?
-We could make investments, since the sector needs to make a varietal replacement, cranberries with longer shelf life, that can travel well in containers, that have color, size, flavor, that one looks for in the fruit. That is why we are looking forward to achieving some measures to be announced before the start of the campaign, because today the blueberries sector, and fruit growing in general, we have complicated not only in the domestic scenario but also internationally. However, Argentina has been characterized by its quality of blueberries and by having a clientele that we do not want to lose.
- The offer of other countries also hurt?
- Yes, the Peruvian offer grew a lot last year and this was evidenced in a lot of stock that led to a reduction in prices in the second half of October in an important way. All this combination of factors made last year a bad campaign for the sector. Bad prices, volume drop and a very negative scenario.
-China is one of the market with recent interest, right?
- There is an important interest of China, obviously the flavor ours understand that it is superior to what they can be importing of other origins. But we have a significant disadvantage that is the 15% of the import tariff that Argentina's fruit pays in China and that is somewhat against because Peru and Chile are with 0% tariff. Also to enter China you have to pay an 8% of the export duty so we are almost with 25 points and our income is reduced by these taxes. We can send fruit to check our quality but I think that Argentina is not going to be an important competitor in the Chinese market due to the lack of competitiveness we have.
-What market are you targeting then?
-Today Argentina is selling in the United States, Canada and Europe, they are our main markets. In the same way, it is increasingly difficult due to the lack of a free trade agreement, just now we have just signed the first one.
The analysis of the agreement
From Apama analyzed that "currently, the Argentine export of blueberries pays tariffs between 3 and 9%, depending on the country of destination. With the entry into force of the agreement, in most countries it will be eliminated, and in the rest it will be reduced by up to half or more. It is estimated that, if the negotiation continues and progresses, the agreement would enter into force in about two years, and the reduction or zero tariff would already impact the 2021 / 2022 harvest. " The holder of Extraberries SA also gave his point of view on the impact of this commercial agreement: "The global impact for the Argentine economy and the rest of the Mercosur countries is very favorable. As well as for the province of Entre Ríos and its fruit export, "said Storni.
-What analysis do you make of the agreement between Mercosur and the European Union (EU)?
-While the cranberry tariff in the EU were small, they were not as high as in China, other competitors such as South Africa, Chile and Peru have zero tariff. Obviously for Argentine fruit growing this agreement is very favorable because we have been left out in many markets such as mandarin, having been the first supplier in Europe of contraestation, today we are a marginal supplier, since it pays a 16% and in two years it will reach zero, that is very positive. The same will happen with the cherry, the pear, the apple.
- Beyond this agreement, you as a sector want more urgent answers
-What if. We applaud and thank you because we know that this is not achieved overnight. We have not seen the fine print of the treaty, but the drafts talked about the fact that in the case of blueberries (the same for citrus) was going to make a period of progressive relief, was not automatic as it is for other fruits.
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