A decline in Argentine soya planting area should stop next year, when the government plans to start cutting its 30 percent tax on exports of the crop, the country's two main grain exchanges said this week. Just after taking office in late 2015, President Mauricio Macri lowered the soyabean export tax from 35 percent while eliminating taxes that the previous administration had put on international wheat and corn shipments.
Macri's policies spurred an increase in wheat and corn planting, to the detriment of soya. But the reduction in soya area is touching bottom, analysts say, as farmers wait for a promised cut in export taxes of a half percentage-point per month for the two years starting in January. "The decision (to cut the tax) puts a floor under this tendency that we are selling less soya," said Agustin Tejeda Rodriguez, chief economist of the Buenos Aires Grain Exchange.
According to exchange data, the soya planting area for 2017/18 in Argentina will be 18.1 million hectares (44.7 million acres), compared with 20.1 million hectares in the 2015/16 season. The Rosario grain exchange said soya area would decrease in 2017/18, the first time it would show declines for three consecutive seasons, but lower taxes would stop the trend in 2018/19.
"It is going to change the producer profit margin equation," said Emilce Terre, the exchange's head of economic studies. Argentina, the world's third largest exporter of soyabeans, started planting its 2017/18 crop this month, with harvesting expected between March and June.
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