The Sunday election that dragged Peronist parties back to the government in Argentina after a four-year parenthesis has led traders and farmers to prepare for a return of export taxes as the country seeks foreign exchange reserves.
In a result that was widely expected, Alberto Fernández, from the Frente de Todos, defeated the central right-wing president, Mauricio Macri, in the polls, winning 48% of votes compared to 40.5% with the remaining 6.2% collected by the candidate independent Roberto Lavagne.
By attracting more than 45% of votes, the result means that Fernández will avoid a second round between the main candidates and will assume the position in the Casa Rosada on December 10th.
However, their support was less than the gain of 15 percentage points that were reported in opinion polls.
And even though I attract support in the province of Buenos Aires, which is the largest province in terms of agricultural production, Fernández obtained fewer votes than Macri in other key agricultural provinces such as Córdoba, Santa Fe and Entre Ríos.
To point out the mistreated peso, which has lost 50% of its value this year, the Central Bank of Argentina limited citizens' dollar purchases to $ 200 per month.
While this does not affect foreign trade, the commercial community fears a possible return to restrictive export and interventionist policies in the agricultural market that were widely adopted by Peronists from 2008 to 2015.
If the return to mayors taxes on exportation is considered a hecho, a greater fear is the imposition of export quotas or even limits on land property to appease a voter base that advocates for the redistribution of wealth .
At the beginning of this year, legislator Felipe Sola del Frente de Todos had asked for interventionist measures in the internal wheat market to regulate the country's internal price.
And Juan Grabois, a social leader with very close ties to the Frente de Todos coalition, recently suggested that the next government should limit land ownership to 5,000 hectares.
With an inflation of 55% this year, and given the need to attract foreign reserves, few analysts expect future quotas and restrictions early in the government.
Meanwhile, the prospect of a type of dual exchange will certainly be increasingly evident, with a lower cost for financial markets and a lower cost for trade to ensure that farmers remain competitive.
Increase in taxes
“The new government is likely to increase tax exports. Nadie in the world will give you a coin as a loan, so you will have to look for a way to obtain money to finance public spending. I believe that exports of taxes on cereals and oilseeds will increase”, says one source of the market.
Current taxes on cereals are 4 pesos per two years exported, around 7%.
But in addition, soybean exports, soybean acceptance and soybean harine attract a fixed amount of 18%, which takes the total to 25%.
Some market participants now expect these rates to increase to 20% for cereals and 30% for oil seeds and their derivatives, around 23% and 20% that existed at the end of the last Peronist government.
Although others are less pessimistic, they expect a less costly increase in grains around 10%.
If taxes reach the upper limit of these estimates, analysts at the Buenos Aires Grain Exchange anticipate that grain production will fall at 5.6% and exports will fall at 14.4%.
This compares with the total grain production in 2019/20 estimated at 131.7 million tons, 3% less compared to the volume of the previous year.
Source: Agricensus
