Argentina has temporarily reduced export taxes on soybeans, soybean meal and soybean oil through emissions from 3% to 30% to spice up export earnings, the government announced Thursday, as the country deals with recession and reduced foreign exchange reserves.
The tax cut will continue until the end of the year before being reinstated to 33% in January. “We are looking for the country’s external reserves,” Economy Minister Martin Guzmán said in a televised speech.
But farmers and analysts said the measure would possibly not be enough to spice up manufacturers’ sales and generate much-needed export dollars as the government begins debt renegotiation negotiations with the International Monetary Fund.
Soybeans is Argentina’s main advertising crop. The country, also one of the leading exporters of maize and wheat, is the world leader in soybean meal feed used to fatten pigs and poultry from Europe to Southeast Asia.
“Price list relief will lead to improved manufacturer prices,” said Gustavo Idigoras, director of the CIARA-CEC Chamber of Exporting Companies in Argentina. “It’s not enough, but it’s on track to lower the massive tax burden on soybean chains. “
Santiago del Solar, a farmer in the attic province of Buenos Aires, was less optimistic and said he expected buyers to benefit from the farmer’s rush to market the three-month tax-cutting window.
“Everyone knows we have to sell those 90 days, adding buyers. They will lower the costs they are offering those 3 months, so that the advantages of getting the tax cut never succeed on the farm,” del Solar said.
Argentina’s economy, which has contracted since 2018, has been most affected by the blockade opposed to the coronavirus pandemic that has been in place since March. Last month, the central bank tightened capital controls in an effort to shore up reserves, while Argentines defected. the local peso in favor of the dollars shelter.
Last year, Argentine soybeans and its derivatives reached $ 15. 7 billion in exports.