South America Calling

Argentine Biodiesel Exports to Recover in 2014

Argentina's biodiesel industry had a terrible year in 2013 after the European Union hiked tariffs on shipments amid claims of dumping.

Exports of the soybean-derived fuel slumped last year and Argentina lost the crown as world's No. 1 supplier to Indonesia.

But things are looking up in 2014.

In late May, Argentina's government cut biodiesel export tariffs from 21% to 11% in a move that will cause shipments to surge 30% to 1.5 million metric tons (mmt), according to the Argentine Biofuels Association.

In a separate boost to production, Congress suspended taxes on local biodiesel use, which was levied at 22% on electricity generation and 19% on vehicle fuel.

Argentina has approximately 33 biodiesel processing plants, which were operating at 40% capacity in the first half of the year following the EU decision to tax imports.

Argentina has requested a panel at the World Trade Organization look at the EU claims. The South American country says it is being penalized for the low cost of soybean production.

The overwhelming majority of Argentine biodiesel is produced from soyoil. Argentina is the world's No. 3 producer of soybeans and is in the later stage of harvesting the 2013-14 crop, which exports peg at a record 55 mmt to 56 mmt.

Higher biodiesel shipments will reduce the availability of soybeans and soyoil for export.

(AG)

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