BUENOS AIRES (Reuters) - Argentine biodiesel exports have ground to a complete halt due to the coronavirus pandemic hammering demand in Europe, the head of the local industry chamber told Reuters.
Last year, biodiesel exports amounted to around 1 million tonnes worth $775 million. The top destination was the European Union, which has quotas for blending petrol with biodiesel. The drop in fuel consumption there during the pandemic has paralyzed the Argentine biodiesel industry, which has generated up to around $1.7 billion in yearly revenue.
“Currently the export industry is stopped,” said Luis Zubizarreta, head of the Argentine biofuels chamber (CARBIO), which includes grains trading giants like Bunge and Cargill.
“Today our only market is Europe and second quarter exports to Europe are totally stopped.”
Zubizarreta said export biodiesel plants in the country are currently inactive, and that due to the stoppage there will be a soybean oil surplus in Argentina this year.
The country is one of the world’s top biodiesel exporters and the No. 1 supplier of soybean oil, which is used to make the fuel. Soy is Argentina’s main cash crop and the suspension comes at the height of soy harvesting season on the Pampas farm belt.
According to data from the state statistics agency, last year Argentina exported about 1 million tonnes of biodiesel, which went almost entirely to the European bloc.
“Next quarter will surely be complicated by low fuel demand. Today the exporting industry is 100% stopped,” said Zubizarreta, adding that a reopening of the U.S. market for Argentine biodiesel would hopefully ease the situation.
Argentina is waiting for the United States to review anti-dumping tariffs that Washington applied in 2017 to imports of Argentine biodiesel, which closed the U.S. market to the South American country. Zubizarreta pointed out that the pandemic has slowed that review down as well.
Reporting by Maximilian Heath, writing by Hugh Bronstein; Editing by David Gregorio