06 September 2012 17:41 [Source: ICIS news]
MEDELLIN, Colombia (ICIS)--The Argentine biodiesel market has been largely quiet in the last week following the recent tax hike on biodiesel exports, anti-dumping allegations by the EU and lower domestic pricing mandated by the federal government, regional market players said on Thursday.
Following numerous requests for government hearings, small and medium biodiesel producers in Argentina will meet with the federal government on Thursday to discuss a solution to the recent export and pricing changes, a producer said.
The export tax jumped to 32% from 20%, according to a government decree.
Also, the government established a lower official price for domestic biodiesel at Argentina pesos (Ps) 4,405/tonne ($947/tonne, €748/tonne). According to market participants, this is a 15% reduction.
The deputy minister of the economy, Axel Kicillof will be at the meeting along with the secretaries of domestic trade, energy and administration, sources said.
Argentina in late August challenged the blockage of its biodiesel exports to Spain. The filing with the World Trade Organisation (WTO) came after the EU filed a complaint against Argentina's import licensing rules, following the Argentine seizure of oil company YPF, a subsidiary of Spain's Repsol, in April.
Starting in April, Spain required all imported biodiesel to be sourced from EU producers. The measure effectively blocked imports of the fuel from Argentina, which had dominated Spain's biodiesel market.
The small and medium producers will argue that the lower domestic pricing forces them to sell biodiesel at a negative margin.
The spot bid/offer range for September was unchanged amid a quiet market at $1,200-1,250/tonne FOB (free on board) at the Argentine port of Rosario.
The producers said that they would have to shut their production and fire employees if selling at a loss is the only option.
The chamber of small and medium biodiesel producers (CEPEB) has appealed to the Argentine government arguing that their situation following the new decree was desperate.
Members of CEPEB said in a letter in August to the executive monitoring unit that the new legislation is, “producing the complete breakdown of the economic balance of companies like ours, and therefore we are unable to continue to produce and to meet our supply commitments”.
The group said that unlike the large producers, who are largely multinational corporations, they are not vertically integrated and cannot continue to operate under the new requirements.
The South American country is the world's biggest exporter of biodiesel.
($1 = €0.79)
($1 = Ps4.65)
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