Decrease in sales may lead to increase in shelf prices

Following a period of growth, sales of yerba mate in the domestic market drastically declined due to the recession. In March, there were 7.7 million fewer kilos of yerba mate shipped from the mills compared to the same month the previous year, representing a 30 percent contraction. Last month, 18,792,347 kilos of yerba mate were sold for consumption in Argentina, a figure not seen since February 2020 according to data from the National Yerba Mate Institute (INYM).

Industry leaders attribute this significant decline to the reduced purchasing power of low-income families, for whom yerba mate often substitutes a meal. Others believe that it may also be linked to stocking up by major retail chains at the end of last year, anticipating price increases. This situation is distressing for the entire production chain as a drop in consumption could lead to lower product values on the shelves, impacting the primary sector.

The INYM is monitoring the situation closely and is expecting to receive sworn statements from mills at the end of April to assess if this trend continues or if sales begin to recover. Meanwhile, the external market continues to show positive numbers, with 10.3 million kilos of yerba mate shipped in the first three months of the year, an increase of almost two million kilos compared to the same period last year.

Despite this, the INYM is facing challenges in determining pricing for unindustrialized yerba mate due to a lack of government appointments and disagreements among industry representatives. The institute has urged the government for clarity on pricing regulations in order to provide stability for the sector. The ambiguity surrounding price setting is causing uncertainty and hindering the ability to establish fair values for raw materials.

In the midst of these challenges, the production of yerba mate remains strong, with over 135 million kilos of green leaf already processed in the dryers, marking one of the best starts to the season in recent years. However, resolving the pricing issue is crucial to ensure the sustainability of the industry and provide stability for producers.