Argentina's new left-wing government raised export taxes on grains and soybeans and their derivatives on Saturday in a widely anticipated but potentially controversial move.
President Alberto Fernandez's Front of All government issued decree 37/2019 to modify export duties imposed by Mauricio Macri's government in September 2018.
The decision was published in the country's Official Gazette on December 14, with the decree eliminating a fixed export tax of 4 pesos per dollar exported and replacing it with a tax of 12% on corn, wheat, sorghum, sunflower seeds and barley .
For soybeans, soybean meal and soybean oil, the export tax is increased to 30%.
According to Argentine brokerage Zeni, tariffs are increasing by 5.3 percentage points across the board, with rates on soybeans and derivatives currently rising from 24.7% and grain rates from 6.7%.
“If there were no further details on Monday, the rates would be 30% for the soy complex (beans and by-products), while corn, wheat, barley, sunflower and sorghum would be taxed at 12%,” said Eugenio Irazuegui, an analyst at Zeni .
The Ministry of Agriculture also issued a resolution to suspend the registration of exports of grains and grain products on Monday, December 16, to allow for the implementation of the new export tax regime.
In the run-up to the arrival of the new government, producers accelerated sales of corn and other products, while export registrations increased as the market anticipated that an increase in export duties would be one of the first steps taken by the Fernandez government to land your finances.
The suspension also suggests the government could make further changes to the scheme early next week, with business sources cited in local media suggesting authorities could set rates even higher in the short term.
Grain associations contacted by Agricensus declined to comment pending clarification from the government.
In an interview with radio station Miter, Daniel Pelegrina, head of the Argentine Rural Society (SRA), said that these changes to export duties would negatively impact grain production.
He also said that the main rural associations had not been previously informed about this measure.
A market source told Agricensus that these increases in export duties would have a largely negative impact on grain production in the 2020/21 cycle.
Source: AgriCensus
