Argentina opens to removing duty on raw hides

Argentina opens to removing duty on raw hides

Argentina’s government opens up the possibility of removing the duty on raw leather exports. Meat industry unions have recently reported the deadlock in the leather supply chain: warehouses are full of stock that local tanneries are unable to absorb. Now, it transpires from the Ministry of Economy that the removal of the duty should be included in the ‘programa Precios Justos’, the set of measures to fight inflation.

The slaughterhouse situation

At the beginning of the month, news of the discomfort of the slaughterhouses in the province of Santa Fé rebounded. The warehouses are full of hides that tanneries do not buy and which, therefore, risk turning from an economic problem into a health threat. As Argentina explains, the persistent drought that has characterised 2022 has forced farmers to increase their delivery rates to the slaughterhouses, despite a stable demand for meat. And a demand for leather that came under pressure, as in many markets.

The export duty

Until 2015, Argentina applied a 15% duty on tanning raw material exports, later lowered to 10%. Still enough to put raw hides out of the market and keep them available to domestic companies. The duty was provisionally suspended from June 2020, then, from October 2020 to January 2021, reinstalled the duty as a reaction to the challenges posed by the pandemic. Now, the meat acronyms are back at it again, and apparently they are also about to win it. They are, however, entrenching themselves behind formulas of caution: “We are waiting for publication in the Official Bulletin”.

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