October 4, 2016
Argentina Will Not Lower Soybean Export Tax Another 5%
President Macri in Argentina is scheduled to announce that the promised 5% reduction in the soybean export tax from 30% to 25% will not happen this year. Since the announcement is scheduled for today (late Monday), it is unclear if he will reconsider the tax reduction sometime in the future or not. He is expected to indicate that the government cannot forgo the revenue from the export tax at a time when the Argentine economy is still trying to develop a firmer foundation.
I currently have the corn acreage in Argentina going up 25% (800,000 hectares) and the soybean acreage going down 3% (600,000 hectares). The corn planting is just getting underway in Argentina and no soybeans have been planted as yet. I think this will encourage some more corn, maybe another 100-200,000 hectares and it might reduce the soybean acreage 100-200,000 hectares. There is still plenty of time for Argentine farmers to adjust their planting decisions, so this needs to be watched going forward.
The biggest impact will be in northern Argentina where farmers complain that their soybean yields are lower, their costs are higher and they have to pay more to transport their soybeans to export facilities. At these low soybean prices and with a 30% export tax, they contend that it is unprofitable to grow soybeans in northern Argentina.