- Posted by Marina
Argentina's new left-wing government ramped up export taxes on grains and soybeans and their derivatives on Saturday in a widely anticipated, but potentially controversial move.
President Alberto Fernandez's Frente de Todos government issued decree 37/2019 to modify the export duties imposed by Mauricio Macri's government back in September 2018.
The decision was published in the country's Official Gazette on December 14, with the decree eliminating a fixed export duty of 4 pesos per exported US dollar and replacing it with a 12% duty for corn, wheat, sorghum, sunseeds and barley.
For soybeans, soymeal and soyoil the export duty is increased to 30%.
According to Argentine brokerage Zeni, the duties are an increase of 5.3 percentage points across the board, with the rates on soybeans and derivatives rising from 24.7% currently and those on grains increasing from 6.7%.
"If there were no further details on Monday, the rates would be 30% for the soybean complex (beans and by-products) while corn, wheat, barley, sunflower and sorghum would be taxed at 12%," said Eugenio Irazuegui, an analyst with Zeni.
The Agriculture Ministry also issued a resolution to suspend the register of grain and derivatives exports on Monday, December 16 to enable the new scheme of export duties to be implemented.
In the run in to the arrival of the new government, producers have accelerated sales of corn and other products, while export registrations have surged as the market anticipated that a hike in export duties would be one of the earliest steps taken by Fernandez's government to shore up its finances.
The suspension also suggests that the government could make further changes to the scheme early next week, with trade sources quoted in local media suggesting the authorities may set even higher duties in the short term.
Grain associations contacted by Agricensus declined to comment as they wait for clarification from the government.
In an interview with radio station Mitre, Daniel Pelegrina, head of Argentina’s Rural Society (SRA) said that this changes in the 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.