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Argentina soy export freezes rattles farm sector

15 March 2022

Tax hikes could negatively impact Argentina's processed soy exports

Argentina's move to halt new registrations of soy oil and meal exports has riled up the South American country's powerful farm sector, with a grains exchange saying on Monday that would force up costs and producers threatening protests in response, reported Reuters.

The South American country, which accounted for some 40%-50% of global soy oil and meal exports last year according to NABSA shipping data, halted new registrations on Sunday, hitting global prices and forcing traders to shift supply.

Industry groups say this is because the government intends to raise tariffs on soy oil and meal exports. The government, which has yet to comment publicly on any plans to hike taxes, did not respond to Reuters' requests for comment.

The Rosario exchange, one of Argentina's two main grains markets, rejected the move, citing likely tax hikes on processed soy exports and "a negative impact on the production and industrialization of the oilseed."

"The announced measure will generate a higher cost for the exports of the agro-industrial complex, putting downward pressure on the value that could be paid for soybeans," it said.

Argentina's soy oil and meal exports are taxed at 31%. The country's 2021/22 soy crop is estimated at 40 million to 42 million tonnes, of which some 5 million tonnes has already been registered for export. The harvest starts later this month.

Farm groups threatened protests against the government.

"It's an outrage," Nicolás Pino, president of the Argentine Rural Society, told local radio. "Since yesterday I have been receiving calls from producers from all over the country wanting to make a great mobilization and to halt sales."

The government, battling high debt levels and fresh from striking a $45 billion staff level deal with the International Monetary Fund, needs tax revenues from soy sales to bolster dwindling foreign reserves and lower its fiscal deficit.

Argentina is also keen to rein in domestic food prices with inflation running at 50% annually and the Russian invasion of Ukraine causing global grains prices to spike.

Source: Reuters



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