| BUENOS AIRES, April 6
BUENOS AIRES, April 6 Argentina's protectionist
policies toward the sugar business are preventing it from
reaching its full potential as a producer of the sweetener, the
head of the Luxembourg-based agricultural conglomerate Adecoagro
told Reuters in an interview on Thursday.
The company, founded by Argentine businessmen, has
invested $1.2 billion in sugar and ethanol production in
neighboring Brazil, the world's top sugar producer.
"Argentina has natural competitiveness, but it needs to
change many things. The system is very antiquated compared with
Brazil," said Mariano Bosch, co-founder and executive director
at Adecoagro, in an interview during the World Economic Forum on
Latin America in Buenos Aires.
"There are a ton of regulations that don't allow sugar to be
competitive, since it's been protected for 20 years."
Argentina is expected to produce 2.1 million tonnes of sugar
in the 2016/17 crop year, three-quarters of it destined for the
domestic market, according to the U.S. Department of
Brazil is looking to include sugar on the list of
tariff-free goods within regional trade bloc Mercosur, which
also includes Argentina, Paraguay and Uruguay. But the Argentine
government, despite its support for free-trade measures more
broadly, has resisted amid sugar producers' opposition.
President Mauricio Macri's administration has said it could
double the minimum percentage of ethanol, made with corn or
sugar cane, required in fuels within three years. The minimum
level is currently set at 12 percent.
"That of course would be a positive sign for the business by
putting it at the same level as Brazil," Bosch said.
Brazil, the world's second-largest ethanol producer after
the United States, currently requires biofuels to make up 27
percent of gasoline sold in the country.
Adecoagro plans to increase its level of sugar processing in
Brazil to 14 million tonnes within five years, up from 11
million tonnes annually at the moment.
Bosch said Adecoagro could begin manufacturing ethanol from
sugar cane in Argentina as well, once the country's future
policies for the industry were clearer.
"It's something we have in mind," he said.
(Reporting by Maximiliano Rizzi; Writing by Luc Cohen; Editing
by James Dalgleish)