The Argentine Ministry of Agriculture, Livestock and Fisheries has suspended the registration of sales of exports of oil and soybean meal. The decision was communicated on Sunday (13).

According to clarín newspaper, the announcement was made at the beginning of the harvest to prevent the goods from leaving. The measure stops sales and exports of2021/22, but physical shipments were not initiated because there was no harvest.

According to government data, approximately 5 million tons of soybean meal and soybean oil from the 21/22 crop were formally registered for export.

Currently, Argentina is the world's largest producer and exporter of soybean oil and meal. The country is expected to account for 41 percent of global soybean meal exports and 48 percent of global soybean oil exports in the 2021/22 crop, according to the U.S. Department of Agriculture (USDA).

According to analysts, the measure adopted by the Government of Argentina is the first step towards a possible increase in export tariffs, the so-called 'retenciones'.

Although Agriculture Minister Julián Domínguez said the government would not change retention rates, the closure of the export register indicates a change of plans. New measures will be announced on Tuesday (15).

The closure of the register generated a general reaction of repudiation by rural entities, self-organized agricultural producers and the opposition.

Currently, soybean derivatives – oil and bran – are taxed at 31% tax. Grain is taxed at 34%. The expectation is to standardize the three products by 34%.

Government calculations estimate that the tariff change will generate additional revenue of $700 million.

Repercussion

The president of the Buenos Aires Cereal Exchange and spokesman for the Argentine Agroindustrial Council (CAA), José Martins, said he was caught off guard by the decision of the Ministry of Agriculture.

"We were surprised by the closing of the soybean complex export registry," he said.

"We express our repudiation of any change in the rules of the game and any attempt to increase the tax burden on the agricultural sector, especially in a crop hit by a severe drought, which significantly reduced our production," Martins added.

In a statement on social networks, the Argentine Chamber of Processors and Exporters of Oilseeds (Ciara) called the decision "illegal."

"It is totally contrary to Argentina's export interest," they wrote.

Source: Canal Rural