Argentina's soy levy u-turn 'to send corn acres even higher'

05.10.2016

Argentina's u-turn on plans to cut its export tax on soybeans could lift to 30% the jump in sowings of corn this season, encouraging farmers to switch even faster from the oilseed to the grain.

Argentinian president Mauricio Macri overnight delayed until 2018 plans to cut by 5 points, to 25%, the country's export tax on soybeans.

The tax will instead be reduced by 0.5% per month from January 2018 to December 2019, he said.

The delay will encourage farmers to shift even more markedly to corn - on which Mr Macri ditched export taxes nearly a year ago – said influential analyst Michael Cordonnier, president of Soybean and Corn Advisor.

'More corn'

Dr Cordonnier said that he had banked on a rise of 25%, or 800,000 hectares, in Argentine corn sowings for 2016-17, reflecting a drop of 600,000 hectares, or 3%, in plantings of soybeans.

However, Mr Macri's u-turn "will encourage some more corn, maybe another 100,000-200,000 hectares," he said.

The extra area would come from soybean plantings, for which the move "might reduce… acreage 100,000-200,000 hectares".

'Unprofitable to grow soybeans'

He added that the biggest impact of Mr Macri's move would be in northern Argentina, where farms are further from port, meaning bigger transportation costs to get crop for export, curbning returns for growers.

"At these low soybean prices and with a 30% export tax, [farmers] contend that it is unprofitable to grow soybeans in northern Argentina," Dr Cordonnier said.


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