Argentina suspends export license applications for agricultural products

The Argentine government has suspended new export license applications for grains and oilseeds until further notice as the new president, Javier Milei, is expected to announce economic measures later this Tuesday.

The suspension officially began on Monday at 5 pm local time, after a day of skyrocketing corn sales, as exporters rushed to pay export taxes at the current exchange rate of 360 pesos to the dollar ahead of a possible devaluation of the local currency expected to be announced Tuesday.

On Monday alone, corn export licenses amounted to 1.7 million mt while on December 6, they peaked at 2 million mt, data compiled by analyst Javier Preciado Patiño shows.  

Argentina is currently sowing the 2023/24 corn crop and exports are expected to reach 36-38 million mt, Patiño told Agricensus.

Argentina's corn crop is expected to reach 50 million mt, according to Buenos Aires Grain Exchange (Bage) data. 

Currently, soybean export taxes are set at 33%, soymeal at 31%, and soyoil, corn, and wheat at 12%.

From November 19, when Milei was elected, to December 11, export license applications (DJVEs) totaled 10.2 million mt, mostly for corn (7.6 million mt) and soymeal (1.4 million mt).

This represents $2.8 billion, which translates to $552 million in export taxes.

With the peso's devaluation, the government’s gain in tax revenues would be much higher, so the strategy is reportedly to stop the selling spree to obtain more revenues when export licenses are resumed and the peso is set at a new value.

Most sources familiar with the matter expect the taxes will remain unchanged in the short term.

However, others say rumors point to an adjustment, which could see a cut in taxes for the soybean complex and/or an increase in those currently applied to grain exports.