Slight return on risks

Slight return on risks

Slight return on risks

Soybeans, the crop that produces the most foreign currency for the economy

The barely $ 410 million the government will raise this year to increase export taxes on soy flour and oil by two percentage points to close fiscal accounts for gas imports could represent a future loss that would lead to a measure.

First because it represents Direct blow to the olive industrial complex, the sector that carries out the most currency liquidation in the entire economy. In October 2020, the government of Alberto Fernandez restored the tariff difference between soy and flour and oil that were taken away from the government of Mauricio Macri in August 2018. The thick harvest begins next April and increases foreign exchange inflows from May. . Going against a sector that is crucial to getting the dollar does not seem, a priori, the best decision.

The second impact, which could lead to an increase in arrest, is the sowing of wheat, which begins next May.. The country has just reached a record harvest of 21.8 million tonnes, which will leave export earnings, plus flour, at about $ 4.5 billion. While grain prices are at record levels, which have been exacerbated by Russia’s invasion of Ukraine, two leading global exporters, rising spending mainly on fertilizers, are questioning new significant plantings such as last season’s 6.6 million hectares. Add to this the uncertainty of the climate. There are risks that the La Niინიa effect will continue into the fall. This means that there may be less than average rainfall, which does not allow good soil moisture for planting wheat. Added to the climate risk factor in agricultural production is the “political risk” typical of Argentina.. Manufacturers suspect the government will increase their taxes. By deciding to increase their soy flour and oil retention, they got the message that anything is possible.

In addition to the impact, there is a legal debate on whether the government has the authority to increase export taxes.. For entities such as the Argentine Rural Society (SRA), this competence of the executive branch fell in December last year when it failed to pass a budget law that included in one of its articles delegating power from the executive to Congress until 2024. Changes in export duties. The SRA has filed an ambitious appeal to Justice to eliminate this possibility. For other specialists, on the other hand, the government has a legal loophole to increase the soybean flour and oil aliquot by two percentage points, without a 33 per cent perforation.

Beyond a possible legal dispute, Economy Minister Martin Guzman’s decision breaks the bridge that Agriculture Minister Julian Dominguez, as he himself defined at last week’s Expoagro, wants to build a village.. Dominguez and his officials cut off telephones to the press yesterday after an order to close the export register was posted on the agricultural portfolio website, so it is unknown whether they will resist the measure if they give it intellectual support. Be that as it may, the Minister of Agriculture is one of the representatives of one of the governments that believes that Argentina needs to increase grain production, especially when global food security is threatened by the war in Ukraine. Rural people believe that this can not be achieved by raising taxes.

Source: La Nacion