Argentine soybeans facing tax increases

WINNIPEG, Jan. 8 (MarketsFarm) – When it comes to soybeans in Argentina there were few major diversions between the United States Department of Agriculture’s data (USDA) and that from department’s attaché in Buenos Aires. What may bring changes to the country’s soybean industry are tax increases imposed by the new federal government, according to Benjamin Boroughs, the USDA attaché.

The center-left government of President Alberto Fernandez increased export taxes on soybeans, soymeal and soyoil to 30 per cent and nine for other agricultural products on Dec. 14. A week later, the government received the authority to further hike export taxes by another three points for soybeans and soy products and six points for other agricultural goods, in an emergency. Boroughs stated the government’s move was to increase revenues to expand the country’s social services as a means to stimulate its troubled economy.

Prior to Fernandez being sworn in, Argentine soybean growers marketed a large portion of their crops in anticipation of the tax increases. At this time, it’s unclear whether the government will honour the previous tax rate for those soybeans or not, the attaché’s report stated.

Although dry conditions have continued to be a concern, especially in the provinces of Buenos Aires, La Pampa and Cordoba, Boroughs reported 2019/20 soybean production is still pegged for 53.0 million tonnes. That would be on almost 44.5 million acres, up slightly from the USDA’s estimate of 43.2 million, but with a small decrease in yields.

There was a wide difference when it came to ending stocks, with the USDA’s forecast of almost 6.6 million tonnes compared to Boroughs’s call for 11.1 million. The attaché cited larger beginning stocks, imports and total supply combined with less domestic consumption and a smaller crush.

That smaller crush has a direct correlation to the financially troubled Vincentin. The largest crusher in Argentina shut down operations at some of its facilities in December. Along with selling off assets and restructuring its debt, Vincentin has been seeking financial help from the Fernandez government. Boroughs didn’t state if the company received a reply from the government.

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