(Photo: Víctor Accastello, in charge of ACABio, addressing to the audience in the Agroempresario’s conference)

Buenos Aires, August 20th. A few days after the primaries election, the chairman of the largest corn-based ethanol plant, Mr. Victor Accastello from ACABio, told to the media that this industry is operating without profitability margin. “In March, the formula that fixed the ethanol price for the mandatory blend discarded and since that, the Energy secretariat fixed the price in an arbitrary and discretional way, that only bring uncertainty to the industry”, Accastello stated.

ACABio is placed in Villa Maria (Cordoba province), mounted by a US$150 million investment with a 150,000 m3 per year of output capacity. Last November they announced a new US$53 million investment to expand 60% its production capacity.

But the Government policy on biofuels is plunging this industry. According to the RIA Consultores weekly report, corn-based ethanol prices were down from an annual average US$0.80 per liter in 2015 (in the last year of the Cristina Fernández de Kirchner mandate) to US$0.50 in the current year (Jan-Aug) in the last year of the Macri mandate. On the other hand, if an ethanol liter were able to purchase 6 kilograms of corn in 2015, now it only is able to purchase 3.6 kilograms.

Mr. Accastello explained that ethanol prices are disengaged from dollar, gasoline and dollar evolution. With AR$23.24 per liter, the profit could reach AR$1 in the best case, considering amortization of the assets and financial interest. “Meanwhile, oils companies obtain AR$4 or AR$5 per liter when they blend our ethanol with their gasoline”, Accastello complained.

Beyond this particular moment, the official is waiting for better times. He thinks that the blend should be upgraded in the close future. “Brazil is blending at 27.5% and using flex engines. I hope that Argentina’s biofuels policy goes in that direction”, he said. “In that context, there would be a great future for all in this industry. New investments could be placed in Salta Province, San Luis or the Western Buenos Aires, adding value to the corn and creating opportunities for the rural communities”.