Argentina delays reduction of soybean export taxes

19.10.2016

Beginning January 2018, the export tax will be reduced by 0.5 percentage points each month until December 2019.
 
The Argentine government announced it will delay a previously planned reduction of soybean export taxes until 2018, while implementing a new plan to bolster soybean production in the northern part of country. Beginning January 2018, the export tax will be reduced by 0.5 percentage points each month until December 2019. By the end of 2019, the soybean export tax will be 18%, down from its present level of 30%. In addition, Argentinian President Mauricio Macri explained his plan is intended to bolster soy production in 10 Northern provinces by providing a refund equivalent to 5% of the free on board price (FOB) price of soybeans beginning in March 2017.

The 2016-17 soybean area harvested is revised down to 19.3 million hectares due to greater competition from alternative crops, corn and sunflower, and lower-than-expected wheat plantings, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said in an Oct. 4 report.

Argentinian soybean producers enter the season with relatively good margins, the report said. Overall production costs are manageable as agrochemicals costs are generally lower while freight and fuel costs are slightly higher. Soybean crush for the 2016-17 market year was revised down to 41 million tonnes, and 2016-17 soybean exports also were revised down, to 9.5 million tonnes, based on lower soybean supplies.

The FAS said producers are in better financial shape generally after the 2015-16 season after the Argentinian government devalued its peso by 50% and lowered export taxes by 5 percentage points for soybeans and their byproducts. The new policy environment and along greater financial resources — personal savings and/or credit – has led to higher demand for technology and interest in long-term investments. One example is the demand for farm machinery, which experienced a 3% increase in sales during the first half of 2016 compared to the same period the year before. Driving the sales uptick was the increased demand for planters, which represent more than 45% of the increased sales of farm machinery, followed by harvesters, tractors and implements.


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