Positive news for agriproduct suppliers was announced from Buenos Aires last week, when the President of Argentina, Mauricio Macri cancelled the current 6% import duty placed on high-quality diammonium phosphate (DAP) from Russia.
Andrey Guryev, CEO of PhosAgro, announced via the PhosAgro media centre that his company was already, “considering increasing sales of fertilizers to Argentina”.
Speaking in his role as President of the Russian Association of Fertilizer Producers and Chairman of the Russian side of the Russian-Argentine Council of Entrepreneurs he stated that, “The joint efforts of federal authorities, including the Ministry of Foreign Affairs and the Ministry of Economic Development, as well as the intergovernmental Russian-Argentine commission for cooperation in trade, science and technology, the Russian Union of Industrialists and Entrepreneurs, and the Chamber of Commerce and Industry have successfully upheld the interests of Russian business on the international arena by lifting restrictive measures on the trade of high-quality Russian mineral fertilizer products.”
Guryev was keen to declare the decision a ‘win-win’ situation. He also showed his appreciation to President Macri by telling commodity investors at Investegate that, “We are grateful to the Argentine authorities for the constructive dialogue and willingness to bolster mutually beneficial cooperation between Russian and Argentine companies.” Adding that, “Russian fertilizer producers are not the only winners from such a decision; Argentine farmers and their customers will also benefit from additional volumes of 300-350 kt of high-quality DAP products that are free from potentially harmful contaminants.”
AgroPhos had already made it clear that, alongside Russian domestic sales, Argentina and the rest of Latin America is seen as a “high-priority market”. Announcing that, “Agricultural products and mineral fertilizers, which are necessary for increasing the efficiency of agricultural production, together constitute one of the most important and largest areas of trade between Russia and Argentina.”
As recently as 2016, Russian fertilizer exports to Argentina had grown by 160% year-on-year to 521kt, an amount that made up 43% of Russia’s total exports to Argentina.
For many years, chemical suppliers and agriproduct traders have complained about legislation from Buenos Aires that they believe unfairly taxes or complicates imports of raw materials to Argentine markets.
As Reuters reported in March 2017, “In Argentina, importers buy goods and then must ask the government for permission to bring them into the country.”
Many chemical product suppliers have complained about the “country’s byzantine customs system,” with many taking the government to court hoping to have their goods released for sale.
Ruben Garcia, president of the Argentine Chamber of Importers, explained the situation in a recent interview, when he said, “This is protectionism, plain and simple. Importers are looking for judicial rulings because there are impediments that should not exist.”
However, the situation is changing rapidly, as Macri attempts to bring in the much-needed commodity trading reform. As Reuters reported, “Since taking office in December 2015, Macri has eliminated or reduced export taxes and restrictions on agricultural products and minerals, allowed the peso currency to float and has aggressively pursued free-trade pacts.”
The US government has also organised for American pork imports to be permitted, as the industry journal Pig333 reports, “The National Pork Producers Council (NPPC) applauds the Trump administration for negotiating US pork access to the Argentine market.”
This latest import tax removal on diammonium phosphate (DAP) has pleased phosphate suppliers, local farmers and fertilizer manufacturers who can now operate under improved business conditions. The lifting of the duty is also seen as part of a wider goal towards global free trade.
As Guryev notes, “The illogical situation in which high-quality Russian DAP, which is free from potentially harmful contaminants, was subject to import duties, while fertilizer containing harmful substances were allowed without being subject to duties, has now been resolved.”
Photo credit: SuccessStory, Flamingo Shipping Service & Supermaritime
If you are interested in more information about diammonium phosphate (DAP), or similar agriproducts such as monocalcium phosphate or potassium sulfate then please contact the AG CHEMI GROUP sales team or simply browse the AG CHEMI GROUP catalogue here.
