Argentina to consult industry on soymeal, soyoil export tax cut

After eliminating floating export taxes and hiking fixed duties over the weekend, Argentina’s new left-wing government may yet cut export taxes on oilseed products such as meals and oils, the agriculture ministry said Sunday.

In a statement released over the weekend, the ministry said authorities will consult with industry to set fresh levies “that encourage and increase the production and export of products of high added value.”

This suggests that products including soyoil and soymeal would pay less export duty compared to grains and oilseeds in any future regime - a dynamic that has been in place under the Macri government and benefits operators of big crushers such as ADM, Bunge, Cargill and Louis Dreyfus.

On December 14, the government issued a decree to eliminate fixed export duties of 4 pesos per exported US dollar, leaving a 12% duty for corn, wheat, sorghum, sunseeds and barley.

For soybeans, soymeal and soyoil the export duty was increased to 30%.

The Agriculture Ministry noted in the release that this decision was not an increase in export duties but a move to correct the sharp devaluation of the local currency against the US dollar since the implementation of this scheme in September 2018.

On Sunday President Alberto Fernandez said in an interview that the government would discuss a new scheme of grain exports duties with rural entities.

The country’s main rural associations confirmed that they will have a meeting on December 16 to analyse the recent changes in the export duties scheme.

Many rural associations in the provinces have strongly opposed the measure and called for protest actions against the government.

Argentina’s Rural Society (SRA) said in a release that the decision of the government to change the scheme would have a negative impact of $1.8 billion.

“The measure implemented by the government is not part of an integral economic plan and would have a negative impact in the profitability margins of producers, which are already very tight.”