Argentina raises export duties on soybean meal and oil

(adds second and third paragraphs with statements by Argentine Minister of Agriculture) Buenos Aires, 19 Mar Argentina raised this Saturday the rates of export duties that the State charges on soybean meal and oil placements from 31 to 33 per cent, products of which the country is the world's leading exporter, with the proceeds of which will fund a “wheat stabilizing fund” to stabilize the price paid by the mills. The Minister of Agriculture, Livestock and Fisheries, Julián Domínguez, explained at a press conference that President Alberto Fernández instructed his ministers to implement measures to bring the price of wheat “to prewar values” while the consequences of the price increase due to the war in Ukraine last and to “decouple the Argentine price of international prices”. Faced with the discontent of the oil industry, Domínguez explained that the increase in export duties of 2 points for soybean flour and oil and 1 point for biodiesel reaches eleven companies, of which eight export 95% of soy by-products and appealed “to solidarity and common sense” of those who manage these companies in the “absolutely exceptional” circumstance of the war conflict. INCREASE IN RIGHTS AND FUND Through Decree 131, the Government of Alberto Fernández suspended until December 31 a decree of 2020 - 790 - which reduced the export rates of soybean meal and oil to 31%, resulting in the re-entry into force of the 33% value. With the publication of Decree 132, the Argentine Government created the “Argentine Wheat Stabilizing Fund” with the aim of “stabilizing the cost of the tonne of wheat purchased by Argentine mills” and which will be formed into a trust composed of the resources resulting from the temporary increase in oil export duties and soybean meal set this Saturday. The measures are part of the so-called “war on inflation” that Fernández announced would begin last Friday and which consists of measures that will be implemented and that his ministers will report daily. Consumer prices in Argentina accelerated last February to 52.3% year-on-year and 4.7% monthly, according to the National Institute of Statistics and Censuses (Indec). February inflation was driven by a sharp rise in food and beverage prices, of 7.5% per month and 55.8% year-on-year, pushing the cost of the food basket and, consequently, negatively impacting the already very high rates of poverty and indigence in Argentina. Fernández said in a speech last Friday that inflation is a “historical phenomenon” in Argentina that the war in Ukraine is “aggravated” by the rise in the price of raw materials and referred to the rise in the price of wheat that impacts the price of bread, noodles, flour for domestic consumption. REJECTION OF THE INDUSTRY The Chamber of Oil Industry of the Argentine Republic (Ciara) “rejected” this Saturday the increase in export duties for soybean meal and oil to 33%, stating in a statement that it “threatens the industrialization of soybeans” in the South American country. CIARA also noted that the increase in export duties “is not legal” given that the executive branch lost delegated powers of Congress and the decree must be endorsed by a Bicameral Commission, warning that agro-export companies are “analyzing all legal actions to question the decision.” The chamber said that the measure “discourages exports”, recalling that soybean flour and oil account for one-third of Argentina's total exports and are in first and second place in the country's annual ranking of total exports. He considered that the Argentine Government had alternative decisions to make, but decided to raise the rates of processed products that “do not affect the inflation rate, but deteriorate the production, labor and export conditions of the first national export complex.” CHIEF vd/laa