AFIP measure complicates wheat sowing and lack of fertilizers / Argentina News

When the damage count of the brutal drought on summer crops had not yet been made, a sudden measure of the AFIP it is threatening the next wheat planting, which should start in just over a month.

It is because of the uncertainty that the fertilizers and phytosanitarywith serious difficulties to obtain import permits in a timely manner with the SIRA since last October, a new sudden removal of exceptions arranged by the AFIP Resolution 5339: Now, they must advance 6% of Profits and pay VAT, 21% in the case of phytosanitary products and 10.5% in the case of fertilizers.

Fertilizers: between 16% and 27% more in dollars and with paralyzed sales

“In practice, every ship with fertilizer that arrives from now on, even if it was bought and sold before the resolution, you have to pay 16% more in dollars for VATand there must be no less than ten ships already on the way,” they explain from a company in the sector.

And they add: “Although the VAT would have to be recovered when invoicing, they ask you to wait 9 months to do so, when there will be another government, so with luck they will return it to you in pesos almost a year later. On the other part, they add a 6% presumed profit, in a sector that has a profit margin of 2%…”.

So it was that, this week, some producers who wanted to buy fertilizers for the next wheat planting, which should start in 45 days, they came across the news that the companies had suspended sales until analyzing the measure well, and they shared the concern on social networks. “Surely, not everything is going to be transferred to prices, but a part obviously is: there is a cost of advancing the money for so long and with so much uncertainty,” they commented in another company.

Wheat is the main “winter” crop. Its planting begins in less than 60 days, and at that time it requires a significant dose of fertilizer.

Last year, according to the Chamber of the Argentine Fertilizers and Agrochemicals Industry (CIAFA), the fertilizer market was about 4.8 million tons, of which only 1.8 million are produced in the country, while that the rest matters. For this year, the estimated fertilizer sales numbers in the sector are around US$2.4 billion.

As for phytosanitary products, “80% of consumption is synthesized and/or formulated locally”, a development “that inevitably depends on the possibility of having raw materials to produce”, the entity points out.

Claim of crop chains

“Resolution 5339, recently sanctioned by the AFIP, change the rules of the game againmaking the cost of a large part of the imports made in the country more expensive,” said Acsoja, Maizar, Argentrigo and Asagir, the four entities that bring together the productive chains of the most important crops in Argentina, the soybean, corn, wheat and sunflower.

“As far as our sector is concerned, it will impact higher prices of imported inputs (fertilizers and phytosanitary products), which make up a majority of the production costs of our crops,” they said, as well as parts of machinery. So, urge the government to fix it: “Otherwise, there will be a future of smaller harvests in volume and quality, more impoverished soils due to fewer applications of fertilizers, and more obsolete machinery,” they warned.

About not rained… the problems with the SIRA

The CIAFA chamber expressed itself along the same lines. “In the midst of this historical drought, we are asking to return to the exception for agricultural products, phytosanitary products and fertilizers“, Armando Allinghi, executive director of the entity, told iProfessional. “In addition to this extra cost that Resolution 5339 supposes, we face problems with SIRA,” said the manager. “Permits have been approved, but we have the crops On top of that, we need a dynamic that can’t stand a 60-day delay”.

From the approval of the import permit (SIRA), it takes 45 to 60 days to bring the product into the country, and then it must be nationalized, processed and distributed. That is why, for wheat, permits are required today.

Although before some companies went ahead to buy and waited for the permit to arrive with the merchandise on the high seas, today no one dares to do so, since the permit can be approved long after the price may have fallen and it is not profitable, or As explained by one company, “it can happen that the ship arrives and the SIRAs are not there, so it cannot be unloaded, and each day the ship is stopped costs no less than US$20,000.”

“To ensure there is wheat productsthere is decisions to be made now“, synthesize from another company.

It remains to be seen how the “agro dollar”, anticipated by Minister Sergio Massa, will play in this mess.