La Nación / Oil Companies Expedite Special System Regulations Due to Grain Shortage

The special temporary import regime for oilseeds intended for industrial processing under the temporary entry method was established on May 27 by the Government by Decree No. 7051/2022. From the Paraguayan Chamber of Oilseeds and Grain Processors (Capro) they describe this move as positive and that it will allow national industries to continue operating throughout the year.

The drought that began in the last quarter of last year and continued on the first of 2022 caused a decline of more than 60% of the country’s soybeans. This situation led to the sector entering into a state of speculation because they could only continue to operate until the end of the first semester, at which time the raw material could probably expire at the national level.

In this sense, the industrial association was asking for permission to import soybeans, a fact which was finalized after several meetings with government authorities. In this sense, they indicated that this measure will allow the national oil industries to search in regional markets for at least a small part of the raw materials lost this year.

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The drought caused a 60% drop in the soybean complex, putting the industries under control. Image courtesy.

It is important to note that this achievement will provide the sector with a tool that will allow it to better compete with the industries of other countries, where similar systems have been available for many years. This system allows factories to obtain oilseeds from other countries to take advantage of the value-added advantages in their territories.

In this sense, they indicate that the average manufacturing in the past five years is less than the installed capacity of processing by about one million tons; This means that the agribusiness operates with underutilization of approximately 1 million tons per year even during good growing seasons. They noted that this is a great opportunity to obtain raw materials from abroad and increase their use.

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However, they made it clear that in order for the system to be implemented as soon as possible, the government should regulate Article 12 of the decree, in which total or partial reductions in rates that public institutions may charge, are foreseen, in order to provide clarification on the costs they must incur to make the import efficient. .

All year, they warned Capro that by the end of the first half of this year, industries would run out of raw materials for processing, so they could shut down and leave hundreds of people without work. Although the time had run out and the task of establishing the logistics of the currently non-existent grain movement was too complicated, they were signaling from the Federation that they were doing their best to take advantage of this measure.

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