Yerba mate: Brazil and Paraguay battle for price with Argentina in the Middle East

RIO DE JANEIRO, BRAZIL – The Middle East, mainly Syria, is a key market for yerba mate exports from Argentina. In recent years it was the destination of between 30 million and 35 million kilos; between January and October 2021 -according to the latest Indec figures- there were operations for US$58.7 million, of which 65% went to Syria. However, Brazil and Paraguay are generating “serious” problems since they offer US$1400 per ton at destination compared to US$2200 in Argentina.

Syrian Omar Kassab runs Yerbatera Hoja Verde in Misiones, one of the two Syrian companies producing and exporting yerba mate to the Middle East. At the beginning of last year, he had warned LA NACION that competition with Brazil and Paraguay was becoming difficult. Now he directly says, “we cannot reach that price; there is no way to export at US$1400 per ton”.

He estimates that his shipments to the region fell about 40% last year: “It is not an easy situation to solve; most consumers prioritize price. We have made several attempts, but there is no way out of the problem”.

Kassab explains that these are not markets that others can replace. The other Argentine exports mainly aim at the “nostalgic” Argentines living abroad. “We worked very hard in Turkey for six years, we opened roads because three million Syrians settled there, we invested, we promoted, and now Paraguay is winning”, he explains.

He insists that “everything plays against” to be more competitive: the exchange rate gap, the increase in the price of the leaf, taxes, and the increase in freight rates. “The scheme that governs the dollar makes it impossible to operate. We were calculating to send 300 tons per month to Turkey, and we sent zero,” he emphasizes.

Kassab projected that, in five years, the Turkish market would demand some 40 million kilos a year due to the impact of the exiled Syrians who would influence the locals. “For 45 years, the Middle East has been consuming Argentine yerba mate; we have been sending a hundred containers a month without counting Lebanon and Turkey, which joined less recently; Brazil and Paraguay entered two years ago and took advantage of the opportunity”, he describes.

In Paraguay, the yerba mate industry moves about US$120 million a year, with an annual production of 50 million kilos (against 270 million kilos per year average in Argentina) and exports 20%. The main destination is Spain, followed by Bolivia, Germany, Chile, Poland, Israel, and Turkey. Lebanon is also on the list.

Brazil is the second world exporter after Argentina; its primary market is Uruguay (around 80%). Due to its “yerba canchada” prices, there have already been complaints from Argentine producers since it was cheaper than the local one. The National Yerba Mate Institute stated that the purchases were due to price and not due to lack of stock.