He Government made official the withdrawal of duty for supplies linked to agricultural production, as the presidential spokesperson had warned over the weekend, Manuel Adorni.
Under the premise of “favor productive activity and make it more competitive, tariffs on fertilizers are reduced, which will now have 0%, including urea, ammonium nitrate and the mixture of both, which had an import tariff of 5.4 %, 6% and 3.6% respectively. Tariffs for the import of herbicides based on glyphosate, atrazine and 2-4D increase from 35% to 12.6%, primary atrazine decreases from 24% to 10.8% and herbicides based on 2-4D in salt they drop from 35% to 12.6%.”
There is no doubt that the Government’s announcement is going in the right direction, however it must be sized appropriately. According to Diego Napolitanopresident of the Business Chamber of Distributors of Agrochemicals, Seeds and Related Products of Buenos Aires (CEDASABA), “In fertilizers the true impact today is a 2.7%/hectare benefit. “Fertilizers had a value 10 days ago and now they are 8% more expensive, therefore we do not know if there was a forecast or if it is the fluctuations of the market.”
Regarding phytosanitary products, Neapolitan He clarified that “in the lowering of tariffs is the formulator in Argentina, who is the one who will decide based on his costs if it is convenient for him to bring the formula from China or if he continues formulating in the country. It must be taken into account that to import from there you must have a local registry where the company that you are going to buy from is mentioned and perhaps that company right now has high prices, therefore it is not that due to the lowering of tariffs “Prices are going to drop, meaning there may not be as much variation.”
A positive aspect of the publication of this measure is that it will finally give some dynamics to the market, which had slowed down in recent weeks. The thing is that no one dared to buy a product if a reduction in tariffs was going to be announced later, even if this was almost irrelevant.
The agricultural leaders, with “mixed feelings”
Last weekin a meeting that at the request of the Government was not announced to the press, The entities that make up the Liaison Table met with Juan Alberto Pazo, Secretary of Planning and Management for Productive Development and the Bioeconomy.
The agricultural leaders left with a bittersweet taste in their mouths, because although the meeting was very cordial, it was very similar to the meetings they had with government officials that were less “friendly” to the countryside. In fact, one of those attending the meeting detailed: “We left empty-handed, but at least we had the opportunity to express our opinion.”
As far as he could know Ambitthe meeting was called by Pazo because he is the one who actually decides and sets the course for everything linked to the agricultural sector, where the designated Fernando Vilella is simply a luxury spectator, relegated to technical issues.
The issue of lowering tariffs was also put on the table. Carlos Castagnanipresident of Argentine Rural Confederations (CRA) assured Ambit that during the meeting it was mentioned that in the input sector “Many projected the prices with a dollar of $1900 and with that reference they put the value of the products, which is why now they are going down a little.” Given this concern, Neapolitan assured that “In the market everything is managed by the official dollar. The exchange rate became more expensive in December due to different economic decisions but in no case was that figure reached.”
What the productive sector is actually demanding is what was promised on countless occasions, which is the reduction, gradual removal or elimination of export duties (withholdings). In the countryside they want the Government to understand that sowing (in this case of wheat) could be boosted if the DEX are removed, as happened when he took office. Mauricio Macri: Between 2015 and 2019, wheat grew 40% in production and 130% in exports (according to a Grupo Lonja report). Quite a fact.
According to the information collected by this medium regarding the rest of the topics discussed, on the Government’s side there is satisfaction with the direction that the macroeconomy has taken since “it is giving results.” From the Liaison Table, proposals were presented for the imminent wheat campaign and the reduction of withholdings for cereal was requested, arguing that close to 70% of the producers rent the land and that under that circumstance it will be very complex to obtain profitability .
Beyond the request, the agricultural entities were very specific in warning that despite the claims, they accompany this Government from the productive point of view and that the countryside asks for a sign of confidence, in clear allusion to the need to remove the penalty that falls on soybean holders by not being able to access financing with subsidized rates. This measure was promoted by the previous government and would become void in a few months, but there is still no certainty as to whether that will finally happen or not.
Regarding the DEX (withholdings), rural leaders were informed that there will be no modifications to the schemes until 2025, moment when, according to the ruling party, fiscal balance could be achieved. That is to say, the 2024/25 production cycle will be carried out with the current tax scheme, where producers will have to refine the numbers very well to evaluate the level of technology adoption, regardless of the impact of the measures that will become effective in the next few hours. .
Source: Ambito
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