Buenos Aires — Argentina's Ministry of Foreign Affairs said after a meeting with the US Court of International Trade it is confident that duties will be lifted on Argentinian biodiesel exports to the US, allowing the country to revive production and exports from a more than year-long slump.
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The US Court of International Trade has asked the US Department of Commerce to review the import duties, which were imposed at an average of 74% in April 2018 on allegations that Argentina is dumping biodiesel supplies in that market, the ministry said in a statement late Tuesday.
While the review process will continue, "the decision to date constitutes a very important step to demonstrate that [Argentinian] biodiesel exports do not constitute unfair trade practices," the ministry said.
Argentina's biodiesel exports to the US, once its leading destination for the product, came to a halt in mid-2017 after the first import duties were imposed, making it no longer economically viable for Argentinian exporters to sell to that market. The duties were subsequently increased.
Argentina has been taking legal action against the duties on the argument that it is not dumping the product, or selling at a below-market price to unfairly gain market share. The government and exporters have said that the country is a globally competitive producer of biodiesel, given that it is a low-cost and large producer of soybeans and derivatives for making the product. The soybeans are grown in extremely fertile farmlands within 300 km of the third-biggest oilseed crushing industry in the world that is also located on the shores of rivers for exporting via the Atlantic.
With the US import duties, Argentina's biodiesel production slumped 15% to 2.43 million mt in 2018 from a record 2.87 million mt in 2017, as exports fell by the same percentage to 1.4 million mt from 1.65 million mt, according to data from the Energy Secretariat.
Argentina consumes about 1 million mt/year to meet a 10% blend in diesel. However, growth in local demand has been sluggish since the economy fell into a financial crisis in April 2018, with consumption only holding steady at 634,000 mt in the first seven months of this year compared with the same period a year earlier. That followed a doubling of demand to a record 1.2 million mt in 2017 from 500,000 mt in 2010.
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