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Argentina tea production and exports up.

The 1992/93 season was warm in every sense for Argentine tea producers," said Santiago Fidalgo of Prodaiem tea brokers. "In spite of the continued appreciation of the Argentine peso against the dollar, both tea production and exports grew, giving some optimism to an industry that looked very disappointing a SeasOH ago."

This improvement is largely attributable to increased international demand. When in late October, 1992, Argentine exporters began looking for buyers, they found a thirsty scenario with stocks much lower than usual due to the droughts in Kenya and India. This allowed some exporters to join new markets or to substantially increase their share in others as in the case of the United Kingdom.

New ventures to manufacture Ready to Drink tea and interest from CIS states pressured demand for Argentine tea. A government sponsored contract has been signed to sell 5,000 tons of BOP grade annually to Russia from 1993 to 1997.

Demand increased as the season progressed and prices for Argentine grades, especially off-grades, increased in February/March. Prices to the producer for green leaf were six to seven cents a kilo. Prices for main grades FOB Buenos Aires ranged from between US $1.00 and US $1.13 a kilo and for offgrades between US $0.58 and US $0.70 a kilo.

Production of off grades could not keep up with the demand and this had a detrimental effect on quality with factories working at more than full capacity to keep up. Factories remained opened late in the season when quality generally deteriorates. In August forecasts for total Argentine tea production for the 1992/93 season were between 37,000 and 38,000 tons.

Despite the increased demand, profit margins have diminished. Argentine producers are being squeezed between First World costs and Third World prices. While the government refuses to relax its tight monetary policies, it did announce measures on August 12th to try and lower production costs and increase profitability for both the industrial and agricultural sectors.

Special soft loans made to producers through the state bank should make conditions favorable for next season.

Confidence in the future of Argentine tea has been shown by the appearance of several new aggressive, market-oriented brokers and producers like Prodaiem Commodities and Ceticom S.R.L. They feel that the main challenges facing the tea industry in Argentina are to reduce costs in order to compensate for the over-valued peso, improve quality and consolidate the advances in the trade sector.

Figures released by the Argentine Tea Association show tea exports during 1992 amounted to 36,530 tons at an FOB price of US $28,530,558, this is only marginally up on 1991 figures and reflects exports of stocks from previous season. Chief importers were the U.S. with 18,920 tons followed by Chile with 7,780 tons and the U.K. with 2,208 tons.

Among the older tea growing establishments is Las Marias in the province of Corrientes. Las Marias has been growing tea since 1954 and yerba mate since 1924, one year after tea growing began in the Argentina. Yerba mate (Ilex paraguariensis), grown only in Argentina, Paraguay, Uruguay and Brazil is becoming increasingly popular on world markets.


All Argentine coffee is imported. Figures supplied by the Argentine National Institute of Statistics (INDEC) show that in 1992 imports increased by 18% to 662,000 bags.

Brazil was the major exporter of coffee to Argentina with 521,070 bags followed by Colombia with 113,167 bags. Paraguay's exports to Argentina dropped dramatically from 42,950 bags in 1991 to 7,911 bags in 1992.
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Title Annotation:International Report
Author:Misdorp, Sheila
Publication:Tea & Coffee Trade Journal
Date:Oct 1, 1993
Previous Article:Brazilian association formed for the Cerrado region.
Next Article:A look back on 1993.

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