Argentina lowers the tax on soybeans exports and their derived oil and flour on Thursday until the end of the year to stimulate foreign exchange earnings as the country seeks to protect its reserves to deal with a serious crisis.
The Government of Argentina, the third global supplier of raw soybeans, announced a cut in rates on soybean shipments to 30% from the current 33%.
Last year, soybean export brought in revenues of 15.7 billion dollars to the state's treasury, which is the world's leading exporter of soybean oil and flour.
"The system of export duties (taxes) is being modified. It seeks to encourage exports," Economy Minister Martín Guzmán said at a press conference.
Until last week, Argentine farmers had sold 32.2 million tons of soybeans for the 2019/20 season, 4.4 million less than the sales registered at the same date of the year in the 2018/19 cycle, according to data officers.
However, in both cases it represents 60% of the production of the campaign. Soybean for the 2020/21 campaign has not yet begun to be planted, so it would not be affected by a cut in the tax.
"The reduction of taxes will lead to an improvement in the prices of producers," said Gustavo Idígoras, head of the agro-export chamber CIARA-CEC. "It is not enough, but it is on the right track to lower the huge tax burden on the soy industry."
Argentina is going through a serious crisis after being in recession for more than two years, with high inflation rates.
Last month the Argentine central bank (BCRA) tightened access to the exchange market for consumption abroad, purchase of foreign currency for savings and financing of companies, in order to protect its reserves.
Argentine Rural Confederations (CRA) and Argentine Agrarian Federation (FAA), two of these four entities, said through statements that a temporary rate cut would only benefit the agro-export sector and that Argentine farmers are not withholding their production for speculative purposes.