Argentina corn, wheat export registrations surge amid tax hike rumours

Grain exporters in Argentina registered more than 1 million mt of corn exports and 300,000 mt of wheat on Thursday amid rumours that the country’s cash-strapped government could increase export taxes on grains to compensate for a collapse in its domestic currency.

The figure for corn is more than has been registered in the whole of the previous week.

It comes as the market was gripped by rumours that either an additional flat tax rate could be applied to grain exports or that the current floating tax, which has been in place for the past year, could be increased.

“Rumours also say that the export registry could be closed until new regulations are in place,” said one market source.

The current tax regime of charging ARS 4 for each dollar exported means the government receives a lower percentage in tax should the peso decline against the dollar.

Over the past month, the peso has fallen 20% against the US currency.

Yet while exporters, including Bunge, rushed to register exports for corn and wheat, the same desire was not seen in soybeans, which already attracts a flat export tax of 18% in addition to the broader retention tax of ARS4 per dollar exported.

Earlier this week, Gustavo Idigoras, head of the country’s oilseed crushing chamber CIARA, told Agricensus the government was considering refunding taxes of soyoil and soymeal to help boost crushing activity.

Currently, soybeans exports and their derivative products are treated the same in terms of export tax.

“The government is considering several options. We want the government to lift this kind of punishment for the crushing industry,” Idigoras said.

In September last year, Argentina's government closed its export registry for a week while it implemented a new tax regime – the announcement of which sparked a rush to register grains and oilseeds to avoid the duty.

In April and August this year, exporters registered huge amounts of grains and oilseeds amid similar rumours, although the policy has yet to change.