Gas Shortage Threatens Argentina's Citrus Industry in Northwest

The citrus industry in northwestern Argentina is in a critical phase as natural gas supply restrictions hit industrial plants in Tucumán, jeopardizing the ongoing lemon harvest. While a potential solution has emerged, worries persist about the high cost of energy.

The gas supply cuts began this week, driven by a surge in demand due to a cold wave, forcing restrictions on industrial users. The Argentine Citrus Association (Acnoa) warned that the lack of natural gas and soaring energy costs could halt industrial activity during the peak season. Tucumán's processing plants are operating under severe "Rampa 0" restrictions, with insufficient gas supply from the Northern Basin to sustain fruit processing.

Acnoa had previously sought assurances for supply during the harvest season, but energy system changes have impacted regional commitments. The primary challenge, beyond scarcity, is the cost of available alternatives. Industries might need to turn to imported Liquefied Natural Gas (LNG), priced at around $24 per million BTU – four to five times higher than the standard gas price.

This increased cost makes industrial processing economically unviable, as the higher expenses cannot be passed on to international lemon prices. The situation casts a shadow over the regional economy, with Acnoa estimating that a partial or total halt in activity could affect exports, foreign currency earnings, and approximately 50,000 jobs linked to the citrus chain.

In response, the Industrial Union of Tucumán (UIT) announced progress on an alternative solution following discussions involving the provincial government and national energy sector stakeholders. This development aims to secure natural gas availability for Tucumán's industries, addressing the immediate crisis.