News last update:6 Aug 2012

Taxes hamper soybean export in Argentina

Argentinean farmers are holding on to their soybean stocks because the government is not willing to lower the export taxes on soybeans.

Argentina has lowered its export taxes on wheat and corn shipments but refuses to do the same for soybeans, Cabinet Chief Sergio Massa has said to newspaper La Nacion.

Local press reports had speculated the government was considering lowering the export tax on soybeans to spur farmers holding on to stocks to sell.

Argentina's farmers are sitting on extremely high soybeans stocks from the 2007-08 crop.

About 10 million tonnes of soybeans are resting in silos and other storage systems. Normally stocks level at around 3 million tonnes at this time of the year.

This year's stocks represent 22% of the record crop grown in 2007-08.

Strike with no effect
Already in March farmers began holding back stocks. Then they launched a strike over grain export taxes.

That conflict dragged on for four months before the government backed off the sliding- scale taxes following a Senate vote against the plan.

After the strike ended, farm group leaders urged their members to only sell the minimum necessary to get by. For the rest they should hold onto their stocks in the hope of a rebound in prices.

Since mid-2008 soybean prices have fallen about 50% since and farmers are hesitant to take their beans to market at current prices.

Export taxes on wheat and corn down
President Cristina Fernandez announced this week that export taxes on wheat and corn would be lowered by five percentage points. Further reductions will be put in place if farmers increase output.

These crops are consumed domestically and the move is designed to stimulate production. Soybeans, on the contrary are almost exclusively exported.

Wheat exports will now be taxed at 23%, while corn shipments will carry a maximum 20% export tax.

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