Argentina's biodiesel exports could be devastated if the U.S. government imposed anti-dumping duties on the coutrtry based on a complaint.
Argentina’s biodiesel exports could be devastated if the U.S. government imposed anti-dumping duties on the coutrtry based on a complaint by the U.S. National Biodiesel Board, the heads of two local industry chambers said. The board last week asked the U.S. government to impose anti-dumping duties on imports of biodiesel from Argentina and Indonesia after two years of tension between U.S. and foreign producers over soaring imports. “If a sanction is applied against Argentina in the U.S. market, our exports will no longer be viable. At this point, there is no alternative market,” Claudio Molina, executive director of the Argentine Biofuels Association said on Friday in an interview.
The United States is Argentina’s No.1 biodiesel export market and U.S. sanctions would hit large exporters such as Cargill, Bunge, Louis Dreyfus and COFCO Agri, part of China’s state-run COFCO Group Argentine biodiesel exports to its previous No. 1 client, the European Union, were suspended due to complaints and counter claims pending before the World Trade Organization. Peru, another buyer of Argentine biodiesel, has also placed tariffs on Argentine biodiesel based on dumping complaints.
The Argentine market, where biodiesel is mixed with diesel fuel, is not nearly big enough to absorb the excess should exports to the United States be blocked. Of the 1.6 million tonnes of biodiesel that Argentina exported in 2016, 90 percent went to the United States, according to Energy Ministry data. A hearing will be held in the United States next month to evaluate the U.S. board’s request, Molina said Argentina taxes biodiesel at a variable rate, at 6 percent this month.
But producers pay significantly less for soy oil, the main ingredient of biodiesel, than international competitors because they do not have to pay a 27 percent tax on exports. Local industry representatives say Argentina has an added advantage because its soy fields and crushing plants are located near the country’s ports. “We have much more access to raw materials and we are more oriented toward exporting than the United States is,” said Victor Castro, executive director of the Argentine Biofuels Chamber.
“The system (for resolving dumping complaints) is so bureaucratic and it takes so long that it can leave you out of the market for years without a ruling,” Castro added. The WTO ruled last year in favor of several claims by Argentina against anti-dumping duties imposed by the European Union but the adjudication continues and the duties remain. (Editing by Maximiliano Rizzi; Writing by Hugh Bronstein; Editing by Andrew Hay)