According to Argentinean press reports, citrus growers in the lemon-producing area of Tucumán are considering reverting to the use of wooden crates to pack fruit for local markets as carton prices climb.

A report in regional weekly La Gaceta Rural, finds that some local packaging suppliers have increased their prices by 90 per cent as they use imported materials in production. Prices are therefore effectively still pegged to the dollar, although are payable in pesos, but at the rate of exchange on the open market: around pesos1.70 to the dollar.

Others have reportedly increased prices, in dollars, by 30 per cent and are demanding advance payment to be deposited in dollars in US bank accounts.

Meanwhile, industry observers warn that as the dual exchange rate policy continues in Argentina, exporters will suffer. Under new measures brought in by government to prevent capital flight, the exchange rate has been fixed at peso1.40 to the dollar for exports, but imports must be purchased at the free-market rate, currently peso1.70. A fruit exporter will therefore earn peso1.40 for every dollar earned in exporting fruit, but will have to pay peso1.70 for every dollar to purchase vital imported agrochemicals.

Producers are also reported to be fearful that the government might also re-impose a tax on agricultural exports lifted more than 10 years ago that might further hinder the sector.

The Tucumán citrus association, ATC is imploring Argentinean president Eduardo Duhalde to allow small and medium sized producers access to savings accounts which have been frozen under new economic measures. According to the ATC, producers need to be able to access these funds and transfer them into current accounts. 'If this option is not extended to them, exports may be affected if product quality suffers,' ATC president Enrique Prado was quoted in La Gaceta Rural. 'This situation would cause considerable damage to export activity and the province in general.'