Biodiesel exports surge as sales to United States grow

The country’s biodiesel exports could increase by up to 80 percent in 2016 from a year earlier to 1.4 million tons thanks to growing sales to the United States, according to industry representatives.

Argentina is a leading exporter of the biofuel but shipments have lagged in recent years because of anti-dumping duties imposed by the European Union.

Exports to the United States helped compensate for lost exports to the EU this year after the United States altered rules for importing biofuel from Argentina.

“The increase in the Argentine biofuel exports have been notable.. If they continue at this rate (global) exports could reach some 1.4 million tons,” said Claudio Molina, executive director of the Argentine biofuel’s association.

Last year Argentina exported just 800,000 tons. In just the first half of 2016, exports reached 590,000 tons.

According to the Argentine chamber of biofuels, which counts global companies like Cargill and Bunge as members, exports will likely reach one million tons in 2016, with between 75 and 80 percent going to the United States.

“The companies had to adjust their certification systems and were more prepared after the first quarter,” said Víctor Castro, executive director of the chamber, known as Carbio.

Biodiesel exports from Argentina nearly tripled in the second quarter of 2016 from a year earlier, official data released last week showed.

The US Agriculture Department expects exports to the United States to total 1.3 billion litres in 2016. A year earlier, before the certification change, it had forecast 750 million litres.

Still, the industry faces challenges.

Peru, the number two market for Argentine biodiesel after the United States, is evaluating whether to follow the European Union in applying anti-dumping duties, Argentine industry sources said.

Biodiesel exports have a five percent export tariff in Argentina while exports of soy, the material used in most biodiesel, are charged 30 percent. The EU and Peru believe the difference is unfair.

“Peru is an important destination for Argentina, if duties are applied it would be a new blow to the industry,” said Carbio President Luis Zubizarreta.

He said exports to the European Union could restart next year, after the World Trade Organization ruled in favour of several claims by Argentina over the EU in March, although the EU appealed the decision.

“By the end of the year we hope to have started negotiations to open the market in the first months of 2017,” he said.

Herald with Reuters

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