BUENOS AIRES (Reuters) - The U.S. decision to review its tariffs on Argentine biodiesel could mean a reversal of fortune for exporters whose shipments from the South American country have been practically nil, the biodiesel chamber of Argentina said on Thursday.
The U.S. Department of Commerce announced on Wednesday there was “just cause” to review the taxes it applied at the end of 2017 to Argentine biodiesel, which cut off access to the main market for Argentina’s product at the time.
Wednesday’s announcement prompted enthusiasm from Argentine biofuel exporters whose shipments have slowed to a trickle since September as the European Union (EU), the new main destination for Argentine biofuel, also considers adding tariffs.
“This is a necessary and important first step,” Victor Castro, executive director of the Argentine Chamber of Biofuels (CARBIO), whose members include biodiesel exporters Cargill Inc [CARG.UL] and Bunge Ltd, told Reuters.
“We are convinced that tariffs are a totally unfair measure and it is very important to be able to export to that market,” he said, adding that due to limited international commercial activity, the production level in Argentine biodiesel plants has been very low.
Argentina is one of the world’s top producers of biodiesel fuel, exporting 1.65 million tons worth $1.224 billion in 2017.
This year, biodiesel producers in Argentina exported almost 1.1 million tons of the fuel between January and August, of which 85 percent went to the EU, according to official data from Argentina state statistics agency INDEC. However, in September and October the volume of biodiesel shipped abroad was zero.
The halt in exports coincided with the EU’s expected decision on whether to sanction Argentina’s biodiesel industry over suspicions of receiving subsidies. The EU postponed its ruling in late September, saying it would continue its investigation.
The announcement by the United States that it will review the tariffs comes a few months after Argentina increased duties on biodiesel exports and cut tariffs on grains and soybean oil shipments, a key ingredient for biodiesel production in Argentina.
Reporting by Maximilian Heath in Buenos Aires; Writing by Cassandra Garrison; Editing by Matthew Lewis