BUENOS AIRES: Argentina’s soya crushing volume will drop around 9.5% this year, the head of the CIARA-CEC grains exporting chamber told Reuters on Tuesday, important for both the global soya market and the country’s inflow of much-needed hard currency.

The country, the world’s top exporter of processed soya meal and soya oil, had been impacted by “a high tax burden, the lower flow of grains and the volatility in the foreign exchange market,” Gustavo Idígoras said in a telephone interview.

Idigoras said that the country’s famed crushing plants, which dot the Parana River, would crush around 38 million tonnes of soya, versus what he said was 42 million tonnes in 2019. He said idle capacity currently was at 50%.

“The lower profitability makes it hard to improve the prices paid to producers,” Idígoras said, adding there was less grain flowing from the farms to the processing plants.

Argentina, in recession since 2018 and grappling with a dangerously low level of foreign currency reserves, needs a strong inflow of dollars from exporting sectors, where grains from the country’s fertile grasslands dominate.

The center-left Peronist government has been tightening currency controls imposed since last year, limiting access to dollars, and has previously hiked taxes on farm products.