Argentina's sugar harvest at risk as government gas rules spark 'extreme gravity' warning

The Argentine sugar industry is sounding the alarm over new government regulations concerning natural gas supply, warning of potentially devastating consequences for the ongoing sugar harvest, known locally as the 'zafra'. The Centro Azucarero Argentino (CAA) has formally expressed its "profound concern" to the Secretariat of Energy, highlighting that the new framework jeopardizes both the volume and price of a critical input for sugar mills.

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The new scheme puts the normal development of the zafra and the continuity of activity in the NOA at risk.

This is not just a matter of industrial output; it strikes at the heart of regional economies in the NOA (Northwest Argentina). The sugar harvest, a seasonal activity crucial from April to November, coincides with peak gas demand. Unlike other industries, it cannot be rescheduled. The CAA emphasizes that any interruption or significant price hike could lead to unharvested cane, reduced production for domestic consumption and export, and a shortfall in bioethanol, a key component for gasoline blending.

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We are concerned about the impact of the modifications on both available volumes and gas prices, and we request that access to the fluid be guaranteed under conditions of supply and price similar to last year's.

The situation is compounded by existing delays. Intense rains in Tucumán have already hampered machinery access to fields, pushing back the start of the harvest and milling. This climatic setback means the industry is already operating under pressure, making the energy supply uncertainty even more dire. The CAA points to a "historical inequality" in energy infrastructure, placing the northern regions at a structural disadvantage compared to the rest of the country. This vulnerability, they argue, is being exacerbated by the new regulations, threatening jobs and the entire value chain dependent on the sugar sector.

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The situation is aggravated because the current campaign already presents delays of between 15 and 30 days due to the intense rains registered in Tucumán, which made it difficult for machinery to enter the fields and delayed the effective start of the harvest and milling.