Exports of soybean oil and flour are closed and arrests will increase

Exports of soybean oil and flour are closed and arrests will increase

Exports of soybean oil and flour are closed and arrests will increase

He issued a decree closing the register for exporters; Two weeks ago, the government promised not to affect overseas sales due to price escalation.

Minister Julian Dominguez vows not to increase detention or close exports

The government today suspended the export of soy flour and oilThe value of Argentina’s two major export products, which last year brought the country $ 12.105 million and $ 7.101 million, respectively. The event became known by the order of the Deputy Secretary of Agricultural Markets of the Ministry of Agriculture, headed by Julian Dominguez. As it turned out, A decision was made on both by-products, which are taxed at 31%, to increase to 33% as soybeans. With this tariff increase, the government will save an additional $ 410.2 million with these two by-products.

This is the money it uses for imports during the dollar deficit, even though exports in 2021 reached a record level of foreign currency at $ 32,807,933,377. And in the midst of Russia’s invasion of Ukraine, which pushed up commodity prices.

Less than two weeks ago, the government promised not to close exports and not increase arrests due to the escalation of grain prices.

The same was done by the Dominguez minister at a press conference. “There will be no export closures and increased arrests. These are the decisions that the President has defined as the axis of work and these are the tasks that he has given me. We need to find out the uncertainties and fears, we are very confident in what we are doing. ” An official spokesman said at the time. Even last Friday, when rumors surfaced of a twofold increase in wheat and corn export taxes – today they are taxed at 12% – Dominguez’s spokesmen refrained from any increase in the arrest warrant.

At the Expoagro last week, Dominguez made a strong defense in the field, which surprised the producers at today’s event by closing the soybean flour and oil export register “until further notice”. In a very good business climate, Expoagro left deals at $ 1,500 million. Paradoxically, in March 2008, also after a very active exhibition and against the background of grain prices, which also fell, a few days later the government imposed an arrest in Resolution 125, which led to an ongoing battle with the village. Four long months.

In October 2020, to bring in more dollars, the government reduced soybean grain seizures from 33 to 31% and from 33 to 28% on these grain by-products. The event lasted for three months. Soybeans then returned to 33%, while complex by-products remained at 31%, which will now rise. The oil industry has always defended difference with the argument of promoting industrialization.

Statement from the Ministry of Agriculture, Livestock and Fisheries
Statement from the Ministry of Agriculture, Livestock and Fisheries

In a message posted on the social network Twitter, the Chamber of Oil Industry of the Republic of Argentina (Ciara) said that export taxes have been increased. This is completely contrary to Argentina’s export interests.

The subject considered that In addition to being illegal, it will affect foreign exchange earnings and employment in the #agroindustrial Cordon.

Kiara announced that with the increase in export taxes on soy flour and soybean oil, “This will put an end to the corn, wheat and oil trusts because it changes the terms of foreign trade.”

The Wheat and Corn Trust aimed to subsidize the sale of 000 flours and dried noodles on the domestic market as a result of rising international grain prices in recent months. The oil trust was established in 2020 to subsidize the sale of sunflower oil in the domestic market.

Ciara was told by President Gustavo Idigoras ᲔᲠᲘ What “The argument of the Minister of Economy, Martin Guzman, is that the agribusiness must pay for the imported gas.

As for the effect of the increase, the head of Ciara said: “The impact on the industry is very negative, as it threatens 20,000 jobs and jeopardizes foreign exchange earnings from Argentina as of April. “It starts supplying him with the only real currency the government has.”

For Idígoras, “the inactive capacity of the industry will increase, so employment conditions are very negative in the face of this decision,” he said.

Influence

Lorena D’Angelo, market analyst at consulting firm AZ Group, said the increase in tariffs, which the government will reduce on soy flour and oil, will increase the detention collection by $ 410.2 million.

Strictly speaking, up to now the export tax contribution was estimated at USD 6,358.2 million for both by-products. However, if this happens in the next few hours, the rate hike will reach $ 6,768.4 million.

According to the analyst, with the increase in taxes on by-products, the industry will have a lower theoretical ability to pay manufacturers $ 16 per ton. In this sense, this capacity will be reduced from $ 485 to $ 469 per tonne.

Source: La Nacion

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