The Argentine fruits and vegetable market is projected to register a CAGR of 4.5%, during the forecast period (2021-2026).
As an impact of COVID-19, Argentina's fruits and vegetables market suffered from major challenges; Argentina is one of the leading exporter of vegetables across the world that suffered restricted trade movements as the export industry of the country got affected badly due to repeated lockdowns worldwide, sales got affected as the European buyers put a halt on the purchase that resulted in the post-harvest loss of the produces as most of the fruits and vegetables got dumped within the processing units itself. There was the loss of business also due to new trade restrictions and protocols introduced. For instance, Qatar asked for a certificate of treatment of the merchandise to prevent coronavirus on import of produces from Argentina.
Owing to favorable weather conditions, the most importantly fresh and deciduous fruit produce of Argentina such as apples, pears, and grapes has increased tremendously in recent years. Domestic consumption of fresh fruits is also expected to grow due to a significant increase in production and the lack of competitiveness of local exporters in the international market.
Argentina’s economic problems in the past decade have led to reduced profitability in the sector, resulting in the area gradually falling in the main fresh fruit and vegetable growing regions of Argentina. Such supply-demand gaps will often lead to soaring prices of fresh produce in the commodity markets. Besides the lack of profitability affecting most fruit producers , grape producers are facing the issue of water scarcity, which is also affecting the prices of fruits in the country.
Key Market Trends
Argentina Government Lifts Export Taxes on it's Fresh Produce
In the year 2015, the Argentinian government has lifted export taxes on all fruits and other commodities. In addition, one year later, export rebates were increased for several products, including apples, pears and grapes among others. The ultimate goal of the Argentinian government is to support its regional rural economies. Initially, the removal of export taxes had a significant impact on the international markets, which has made the county's fresh produce highly competitive. In addition, the government had established a 7.0% export rebate for most of the fresh and deciduous fruits shipped from the ports of Buenos Aires. Since 2015, with the new government administration, exports have been gradually barging to their previous levels, which is expected to drive the fruits and vegetable market during the forecast period.
Grapes to Dominate the Argentina Fresh Produce Sector
Over the years, grapes continue to be the primary domestic crop produced in the country despite a 25.0% decline from 2014 to 2017, according to the Global Agricultural Information Network report for 2017. In the year 2018, the production of grapes in Argentina was reported to be at 2,573,311.0 metric ton and 2,519,886.0 metric ton in 2019. Despite good weather conditions favoring the production of grapes in the country, the production of grapes still remained below historical averages due to the lack of profitability for Argentina producers and exporters, especially for the past several years. However, the market attractiveness of grapes, especially in the form of raisins and fresh juices is likely to intensify the fresh grape production in the coming years.
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