The Argentine government has not released payment for imported fruit due to the lack of dollars in the country
Banana producers in Paraguay and Bolivia suspended exports to Argentina due to lack of payments. Exporters from both countries stand to receive more than $22 million for the fruit already delivered to Argentina. Without the money, they decided that the trucks would no longer cross the border starting next week.
Argentina, which will return to elect a new president on Sunday (November 19, 2023), has run out of dollars to pay for purchases made due to the severe local economic crisis. Due to the currency shortage, the country’s central bank released dollars in a controlled manner.
Exporters from Paraguay and Bolivia protested against the lack of payment. This week, banana farmers in Asunción demonstrated in front of the Argentine embassy demanding $10 million in debt. Last week, producers demonstrated in La Paz, the Bolivian capital, demanding Argentine buyers pay $12 million.
The posters usually read the phrase “Paguen las Bananas que se comieron” translated into Portuguese: “Pay for the bananas you ate”.
The problem has existed since June but has worsened in the last two months when payments stopped completely.
Bolivia and Paraguay are the second and third largest banana exporters after Argentina, respectively. Ecuador tops the list but has neither announced the amounts to be received nor taken any restrictive measures. Brazil takes 4th place in the ranking.
Argentina’s annual banana imports by country:
- Ecuador 205.5 thousand tons;
- Bolivia 98,600 tons;
- Paraguay 78,000 tons;
- Brazil 19,600 tons;
- Colombia 5,500 tons.
To date, there is no record of missed payments to Brazilian producers. Brazil has reached an agreement worth $600 million with Argentina to ensure continuity of exports amid dollar shortages in the neighboring country.
Under this model, when selling to Argentina, the Brazilian exporter receives a guarantee from Banco do Brasil, which in turn is guaranteed by CAF, the development bank of Latin America.
Restriction of imports
Argentina is in an economic crisis. Inflation is running at 148% per year, the country’s central bank has a small dollar reserve, and the parallel dollar frequently breaks records.
As a containment measure, the local government has tried to restrain the dollar by restricting companies’ access to the foreign exchange market, which ultimately led to a blockage of imports. The decision has already led to other problems in the local economy, such as gasoline shortages.
In order to import, companies in the country currently have To their businesses with Sira (Import System of the Argentine Republic). On this basis, the government considers whether or not to agree to the release of dollars to pay for imports.