Government of Argentina accused to boycott the biodiesel industry

Most companies participating in this business this year expected to increase investment and exports. But Interior Secretary of Commerce decided to intervene the market to freeze domestic prices. To avoid further damages, the Energy Department did not publish the official reference value in January and February. Entrepreneurs, very annoying, they call unlock the situation.

Everything was given. Most companies that make biodiesel industry had very favorable prospects for the future of the business that has grown significantly in recent years in Argentina.

Until recently the Interior Commerce Secretary Guillermo Moreno, returned to make his own. The official, without consultation to entrepreneurs, decided to freeze the prices of liquid fuels (including biodiesel).

This decision opened up a strong internal Moreno with his pair of Energy Daniel Cameron, who decided not to publish the official price of biodiesel in January and February to ensure that firms participating in the domestic quota experiencing losses.

The fear of the Secretary of Commerce is that the increase has been experiencing soybean oil in the international market be moved to biodiesel, and therefore, fuels that are traded domestically.

The issue is that now companies not only have frozen the price of biodiesel, but because of the internal between Moreno and Cameron do not have a benchmark to enable them to place their production under optimal conditions.

In this context of intervention by the national government, and in dialogue with Politics Online, various industry sources Guillermo Moreno accused of violating the sustained growth of the biodiesel industry.

"We do not understand why he took this decision is clearly damaging to businesses and creates an environment of uncertainty very little favorable to investment planned for the future," said a prominent businessman in the market.

According to other members of industry comment, currently the local biodiesel industry has a production capacity of around 2.5 million tonnes, and before this measure of Moreno, it was thought to continue growing in 2011.

Meanwhile, she learned LPO, Ministry of Planning officials are trying to defuse the situation to finally publish reference prices for January and February biodiesel in the coming days.

"All I ask is that you do not intervene in this way the market and let us work freely to develop a business that has enormous potential in the country," claimed an official of the Association of Biofuels.

Export price and investment

Last year exports of biodiesel increased by more than 10 percent over 2009, going from 1.24 to 1.50 million tonnes. This is because the activity was favored by a differential tax treatment (the biodiesel is withholding about 14%).

About 60 percent of total exports in 2010 were reported for Spain, while 20 percent went to Netherlands, Italy 18 percent and 3 percent in Peru.

With regard to prices, also in 2010 was a notable reorganization that growth was tied to the values recorded for crude soybean oil (basic input for biodiesel), which ended the year near $ 1200 per tonne.

On the investment side, major players decided to enter this business with million dollar projects. Currently, investments, which are mainly concentrated in Santa Fe were moved to other provinces in the north.

Companies

The main biodiesel companies are grouped together in the Argentina Chamber of Biofuels (CARBIO). Among the major firms are Bunge, Cargill, AGD, Dreyfus, Molinos Rio de la Plata, Unitec Bio, Vicentín and the Balkans, among others.

Together, these companies have invested in Argentina more than $ 500,000,000 million and s are distributed around the country with large presence in the Port Industrial Cord zone of influence of Rosario.

Internal Capacity

In January this year the national government decided to begin to blend gasoline with ethanol, and diesel with biodiesel in March. From September, the court required the second case increased 5 percent to 7 percent (to supply this rate requires about 900,000 tonnes of biodiesel).

For this reason, the Government decided to add three more companies to biodiesel supply agreement (internal quota biodiesel). These are firms Collaborative Group San Antonio, Renewable Energy and Biofuels BH.

Source: The Online Policy