Argentina has suspended for six months its program of gradually cutting taxes on exports of soyameal and soyaoil, the Treasury Ministry said in a statement on Tuesday, part of the government's fiscal tightening program. International shipments of both soya products are currently taxed at 23 percent, lowered gradually from 32 percent in 2015, the statement said.
By the end of 2019, soyameal and soyaoil export taxes will be at 18 percent, it said, compared with the 15 percent rate planned before the suspension. "We expect a sharp drop in soyameal and soyaoil exports in the upcoming season. So we will look for the opportunity to have a dialogue with the government about reversing this measure, which we think goes against the best interests of the country," Gustavo Idigoras, head of soyaoil industry group CIARA.
Argentine soya planting starts in late September, with harvesting concentrated in April and May. Beginning after the next harvest, Argentina had expected to export significant amounts of soyameal to China as the South American grains powerhouse moves to take advantage of an ongoing US-China trade dispute. Argentine officials were in Beijing earlier this month to finalize the paperwork needed to ship livestock feed to China.
Argentina is the top global exporter of soyameal and soyaoil, but drought slashed the country's soyabean harvest this year, pushing some global buyers to instead buy soyameal from the United States. Argentina, which in recent months has also booked rare imports of US soyabeans, has said it would continue reducing taxes on exports of whole beans.
"As the soyabean tax continues to ratchet lower they (Argentina) can export soyabeans at a lower tax rate than soyameal. That's an incentive to export soyabeans rather than soyameal and that would keep demand for US soyameal high," said INTL FCStone analyst Arlan Suderman.