Argentina's biodiesel exports are recovering from nearly a year of low sales after an agreement was reached to reopen shipments to the European Union, the head of an industry group said Wednesday.
The deal allows Argentina to export 1.2 million mt/year to the EU, effective from March 2019, Victor Castro, executive director of the Argentina Chamber of Biofuels, or Carbio, told S&P Global Platts.
The result: exports have gone from zero in the first two months of 2019 to 416,520 mt in the first five months, according to Energy Secretariat data. While that is down from 622,779 mt in the same year-earlier period, the deal steadied exports, Castro said.
"Exports have begun on a more regular basis," he said.
Castro declined to make an estimate on how much could be exported this year, only saying that it would probably be less than the 1.4 million mt in 2018.
Earlier this month, EconoJournal, an energy news site, reported that exports could reach 1 million mt this year, citing an unnamed industry source.
The main setback is the impossibility of selling to the US, once the leading destination for Argentinian biodiesel. In mid-2017, import duties were imposed by the US, making it no longer economically viable for Argentinian exporters to sell to that market.
Argentina is appealing the decision in a New York court, but it is uncertain how long that process will take.
That leaves Argentina with the possibility of exporting to the EU and smaller markets like Canada and Peru, putting a limit on production and export growth.
The country exported a record 1.65 million mt in 2017, led by shipments to the US. This allowed production to reach a record 2.9 million mt that year, according to Energy Secretariat data.
Production totaled 923,596 mt in the first five months of this year, down from 1.1 million mt in the year-earlier period, the data shows.
Argentina consumes about 1 million mt of biodiesel for a 10% blend in diesel, demand for which has been stunted over the past year as the economy contracts for a second year in a row under steep inflation and high interest rates. Diesel sales fell 3.1% to an average of 226,956 b/d in the first five months of this year from 234,109 b/d in the year-earlier period, according to the latest Energy Secretariat data.
