The Chamber of Commerce of the Argentine Timber Industry (CAIMA) warned that the local timber producers may soon be forced to stop all production and operation activities due to the shortage of imported raw materials due to the restrictions imposed by the Argentine government on overseas procurement.
Behind the increasingly strict import control measures is Argentina’s gradually bottoming out foreign exchange reserves. As of August, Argentina’s foreign exchange reserves fell to less than 29 billion US dollars, the lowest level since September 2016.
Arauco Argentina, Argentina’s largest forestry industry company, is also one of the companies facing the crisis of production suspension. It directly employs more than 4000 employees in seven factories.
Aircraft manufacturing enterprises are also on the verge of total paralysis. As many as 2000 small and medium-sized enterprises are affected. If these enterprises stop production, it means that about 60000 jobs will disappear.
In order to retain the foreign exchange reserves of the Central Bank, the Argentine government has reformed the import system (SIRA). The specific measures include: verifying whether the import application scale of the importer is in line with its financial resources; The importer is required to designate only one bank account to engage in foreign trade; Importers are required to purchase reserve currencies such as US dollars from the Central Bank at a more precise time.
The new SIRA only allows the entry of products deemed “indispensable”, such as medical and safety supplies. Forestry is not included in this category.
In Argentina’s Misiones province, manufacturers worry that if the shortage of imported materials such as raw materials continues, the closure of the factory will have an impact on the economy of the entire region.
The head of the Argentine Forestry Association tried to have a dialogue with the authorities on the impact of the new SIRA, but so far there has been no result.
Post time: Jan-09-2023