This Tuesday the national government announced that Reduction of export tariffs on agro-industrial products.
In this way, the retentions for soybeans increase from 26% to 24%, for soy by-products from 24.5% to 22.5%, for wheat and barley from 9.5% to 7.5%, for corn and sorghum from 9.5% to 8.5% and for sunflowers from 5.5% to 4.5%.
In this context, the Minister of Economic Affairs said, Luis Caputo emphasized that “the National Government’s commitment to rural areas has existed from day one”. and that “it is a pleasure and a pride to be able to continue to give back to this sector for all it has given over so many years.”
Caputo’s plan for a return to the markets throws the renegotiations with the IMF into doubt
The response from local businesses has been positive, but some are calling for clarification on whether the measure is temporary or permanent. The Argentine Agro-Industrial Council (CAA) welcomed the measure: “The tax relief route is the right one so that the agricultural industry generates more exports, employment and foreign exchange.”
Out of CIARA-CEC pointed out that “this decision to reduce withholding tax is a very positive step that we must appreciate. We must continue to work to reduce withholding tax.” huge tax burden, particularly in the soybean agro-industrial complex.
In a joint statement, the Bahía Blanca, Buenos Aires, Córdoba, Entre Ríos grain exchanges and the Chaco, Rosario and Santa Fe trading exchanges said the announcement “is consistent with the need to reduce the tax burden on the sector” and “contributes to improving competitiveness, promoting investments and creating more favorable conditions for the development of the entire agro-industrial chain, one of the essential drivers of the Argentine economy.”
On his part Diego Cifarelli, The president of the Argentine Milling Industry Association (FAIM) explained that “this type of advertising is always highly valued, They are gestures that help to gain more strength to advance the country through production.”
And he added: “There is still a need to work on cost reductions and to achieve fundamental approval in the National Congress for labor and tax reform.”
Vanesa PadullesHead of Coninagro Córdoba, welcomed the recent reduction in withholding taxes: “But we need a plan for this path, a predictable program. In reality, it would be ideal if they were abolished to zero as quickly as possible, because even their removal would be distorting. Making the measure final is a big step, but.” “We need predictability.” and in this sense he expressed that the measure must be accompanied by certainties about its continuity.
“It’s good, of course, but nWould you like to have a little more clarity about the program and how to proceed? in reducing retentions in order to be able to plan as producers,” commented the manager.
In the same sense, Andrea Sarnari, The president of the Argentine Agricultural Federation (FAA) said the official announcement is a very good sign for the sector. “But we know it will be permanent We are waiting for publication in the Official Journal to confirm it.”
Real implications for producers
Roman DanteProfessor and researcher at the Center for Agribusiness and Food at Austral University, explained that the reduction in withholding taxes had led to an ambiguous reading in the market as their real impact may be limited. “Today the industry should show itself positive margins between 10 and 12 US dollars per ton, but still in negative territory”said Romano.
Towards the new harvest, Predicted margins are $20 to $30 per ton. but grains still have negative margins between $5 and $10.
This is why Romano warns against it “It is not appropriate to expect a linear transfer of the tax reduction to the price, because the market is always defined by supply and demand.” In addition, it is necessary to know the fine print of the decree to know if the reduction is temporary or if it is conditional: “At the moment the measure has little taste.”
LM
About The Author
