Argentina’s grain trade paralyzed by possible export tax increases

The grain trade in Argentina is practically paralyzed as a result of expected government increases to export taxes. The hike would be an attempt to deal with the fiscal deficit amid the serious economic crisis. Experts consulted by Reuters believe that the interruption of grain sales in the domestic market could affect agricultural shipments from Argentina, one of the largest global exporters of corn, soybeans and derivatives.

The main sign that the government intends to raise the soybean tax occurred on February 26, when the Ministry of Agriculture suspended agricultural export records, which generally happens to prevent exporters from continuing to pay a lower rate than what will be be applied. Local media and experts have said in recent days that President Alberto Fernández’s government will raise oilseed export rates to 33%, up from 30% today.

“Buyers are not giving a price. There are practically no operations, ”said Guillermo Mouliá, operator for the Guardati Torti brokerage based in Rosario, where the main grain market in the country is located. When taxes on soy shipments go up, the price paid in the Rosario market tends to fall, as exporters transfer the cost of the tax to producers.

Source: Reuters

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