Asked about the project to tax the “unexpected rent” argued that the initiative “greatly unaware of the increase in production costs” and regretted that “Argentina was unable to capitalize on any of the improvements” offered by the international market in terms of prices and demands.
Below are the highlights of the dialogue held with Ambit:
Journalist: Among the problems that affect them, the sector has expressed concern about the lack of diesel. How is the situation?
Gustavo Idigoras: A month ago we warned the Government about this lack of diesel and we proposed that it authorize biodiesel exporting companies to supply the domestic market. By the last law proposed by Kirchnerism last year, not only was the cut lowered from 10 to 5%, but exporting companies were prohibited from supplying the domestic market to favor SMEs. However, now we are in an energy crisis and, in fact, as an anecdotal fact, Europe is buying more Argentine biodiesel from us from Rosario to replace diesel from Ukraine and in Argentina it is not possible to supply the internal market.
Regarding the price of imported diesel, export biodiesel is below that price; This is not the case for SMEs, which is much more expensive because they have higher logistics costs, so the oil companies do not want it either.
In the meetings at Government House, with the Chief of Staff, Juan Manzur expressed his agreement because he understands the issue, since he comes from a province that produces bioethanol. But the Secretary of Energy looks at another energy matrix and the oil companies insist that it is a temporary problem.
We believe that this problem will last throughout the year and especially now that in the next ten days the consumption of diesel in Argentina will double due to the start of the harvest.
Q.: How do you evaluate the inflationary impact derived from the rise in prices of raw materials due to the war in Ukraine?
GI: As for the inflationary effect of international prices, it has been shown that it exists mainly due to energy shortages rather than the increase in food prices. The increase in the price of food, according to calculations by international and prestigious organizations think tanks Worldwide, annual inflation is estimated at 5% in countries that export wheat, corn, and sunflower oil. But we already know the rates we have in Argentina, so it is clear that the war and the rise in food prices are not the cause of the increase in prices in our country.
Q.: How much additional income will the State obtain from the rise in commodity prices?
GI: The state is going to have an exceptional income this year from exports of the grain-oilseed agro-industrial sector. Last year he already had a record; It was at 36,000 million dollars. This year it is estimated at 40.5 billion dollars. With the current withholdings, including the increase, the State will have an additional fiscal income of around 2,500 million dollars because last year it already had 8,600 and this year it will exceed 10,500 million dollars.
Q.: What other effect does the war in Ukraine have on Argentina?
GI: There is a positive effect of this war linked to the fact that two powers, Ukraine and Russia, have disappeared from the market. And, therefore, the world begins to look, especially North Africa, the countries of southern Europe and those of the Middle East – which are the ones that were supplied by Ukraine and Russia – at Argentina as an interesting country. which is not in the war zone, with great production and export capacity and therefore we are receiving many purchase requests from all these markets. Unfortunately, the Government intervenes in exports and has a system of export quotas for corn and wheat that prevent taking advantage of these prices and growing in volumes.
Also in sunflower oil we have a trust for the domestic market whereby every time we export we have to subsidize more, therefore, it is not convenient to export more either.
So, unfortunately, Argentina is going to miss another train of opportunities.
Q: The Economy Minister anticipated that he is working on a project to create a fund with the unexpected income that some sectors benefited from. It is estimated that agricultural commodities, among other products, will be incorporated. A priori, what is his opinion?
GI: It is understood that this rent would be a priori on the oil and mining sectors and some agricultural commodities impacted by the war. However, the increase in production costs is largely unknown.
In the agricultural sector, production costs and the scarcity of inputs such as fertilizers, which are produced precisely by countries that are at war, have had a much stronger impact than the capture of international prices. Let’s remember that international prices could not be captured because, as I said, the Government quotas exports of corn and wheat.
Argentina sold before the war in the case of wheat. And in the case of corn, it did not have an authorized marketing campaign. The biggest problem that Argentina had is with sunflower oil, which had a price increase of 90% worldwide.
Argentina is the third world exporter after Ukraine and Russia. Demands for sunflower oil poured in from European countries, the Middle East, North Africa, but none of them could be met because Argentina has a private trust for internal supply, with which each additional ship of sunflower oil triples or quadruples the subsidy to the domestic market and ends up being an export loss.
So Argentina has not met any of these incremental demands, but it did have to increase the domestic subsidy.
Today Argentina has a price absolutely disconnected from reality, when in the world it costs 2,200 dollars a ton of sunflower oil, in Argentina it is selling for 900.
This situation generates many diversions, especially border consumption, there is smuggling and wholesale or retail sales operations, in different provinces, that sell to neighboring countries or there is a greater use of the family gondola container by industries that are going to look for that subsidized price. Therefore, in the end, Argentina was unable to capitalize on any of these improvements.
Q: How do you evaluate the progress of the economy?
GI: The Argentine economy is in an extremely complex stage, with high levels of uncertainty, with a growing inflationary process that has an impact on all goods and services in the economy and also on exports. Because this inflationary process does not accompany a currency devaluation process, quite the opposite, and therefore implies that there are additional costs every month for exports.
To that, the sector has to add the enormous delays of the AFIP to return VAT, which are dead weight. Likewise, the difficulties we have in accessing the international market to finance ourselves. Let us remember that this sector needs around 30,000 million dollars per year from the international financial system that they lend to be able to enter Argentina. Those are the dollars that the Central Bank then has and that it costs us more every day to obtain because Argentina continues to be penalized in international markets. In addition, we have growing union conflicts, not directly with oil companies, but with third-party service providers such as UOCRA (construction) or others that paralyze ports, as has just happened with carriers.
Since they see that stopping the ports is the only way to get them to pay attention, so they use us as a hostage to show their own problems and get the government to act, because they know the government needs those dollars.
This puts us in a very difficult situation, because we are not alone in the world, we compete with Brazil, the United States, Canada, Australia, very serious, credible countries, with good logistics and financing and without union conflicts. Every time this happens, we lose more markets in the world.
Q: What difficulties do you have with the AFIP?
GI: There is a very serious problem around the VAT refund. No country exports VAT, so there is a process for refunding this tax. However, this week, the AFIP began to notify that it will reject all requests for VAT refunds, which add up to a cumulative amount of 10,000 million pesos. This is working capital to buy grain, so it generates a phenomenal financial cost. That is why we say that the AFIP is not helping the thick crop to be marketed.
Q: How much is the average salary of a worker in the oil sector? Did you have the request to reopen the parity?
GI: This is an industry that attends workers in a very special way because we have a joint venture that is the highest reference joint venture in Argentine agribusiness. Today a worker who starts his activities in the oil complex in Argentina has an average salary of 200,000 pesos and we already anticipate this year around 35 points, with which our review will be in the middle of the year.
Source: Ambito
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