Argentina growers see mixed picture in higher exports, lower profits

Argentina growers see mixed picture in higher exports, lower profits

Exporters in northwest Argentina report higher exports and sales, but profits have been dented by the weak U.S. dollar and higher internal costs,  San Juan newspaper Diario de Cuyo reported on its website.

Profits are up 13.53% in the first half of 2010, compared with the same period in 2009, totaling US $272 million. And export volume is up 7.83%, with shipments of nearly 386 million kilograms, according to data from the Chamber of International Commerce of San Juan cited by the newspaper.

However, businesses are far from celebrating. They say that the gains have gone up in smoke, neutralized by the rise in internal costs and inflation, as well as with the exchange rate.

In a document sent to San Juan exporters, the declines in the economic situation are seen in the main products exported from San Juan – table grapes, garlic, grape juice, raisins and olive oil – and warned that it “will be very difficult to maintain profitable international markets  without recovering lost competitiveness,” the website reported.

Better prices vs. expenses

The sale prices for products varied from 10% to 25 % more in the first half of the year, compared with the same time in 2009, while internal costs rose in some cases up to 60%.

Chamber President Antonio Giménez said that the exchange rate and inflation were the two key factors. Other factors included rising prices for materials, labor, energy and transportation.

Competition also affects the situation in San Juan. For example, it costs 12% more to produce a kilogram of table grapes in Argentina than in Chile, according to the newspaper. Salaries in Argentina are slightly higher, while packing and storage can costs 30% more than in Chile.


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