May 13, 2010
Argentina Proposes Banning Imports of Certain Food Products
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The Argentine Minister of Commerce announced last week another step in the government's effort to keep a tight rein on the agricultural sector of the country. Starting on June 10th, the government will prohibit supermarket chains in Argentina from importing food products from their neighboring countries that could be produced in Argentina. The proclamation is as yet unofficial, but it appears to be aimed directly at Brazilian food manufactures. Rumored to be on the list of prohibited products are pork, tomatoes, and canned corn.
The newly appointed Brazilian Minister of Agriculture, Wagner Rossi, feels these proposed trade barrier are the result of various lobby efforts by producers in Argentina. He indicated that the Brazilian government has not yet been officially notified about the proposed trade barriers and that the topic will be discussed next month when various Ministers of Agriculture from South America meet in Mar del Plata, Argentina.
Brazilian Food Industry Association spokesman, Edmundo Klotz, indicated that Brazilian food manufactures have recently encountered problems in selling canned corn to various Argentine supermarket chains. He feels that if the ban actually goes into effect, it would be difficult for the supermarkets to find domestic products equivalent to those banned from Brazil.
If Brazil retaliates with its own ban on various food or grain products, it could end up being a significant problem for Argentina. Argentina does not purchase much manufactured food from Brazil, but Brazil is the number one destination for Argentine wheat exports and Brazilian millers usually purchase nearly all of Argentina's wheat exports. Nothing has yet been made official, so all parties continue to weigh their options.
This is just the latest attempt by the Kirchner government to control nearly every aspect of Argentina's agricultural sector. In recent years, they have implemented export taxes on commodities as high as 35%, they have limited agricultural exports, and they have even banned some agricultural exports. All this is an attempt to control domestic prices and the ever-increasing domestic inflation.