October 3, 2007

 

Argentine soy, meal export commitments soar on tax fears

 

 

Argentina's soy and soymeal export commitments have soared over the past weeks as high prices and speculation that the government is considering raising the export tax on soy products pushed companies to lock in shipments, according to sources.

 

Exporters had declared 2007-08 soy export commitments of 3.2 million tonnes as of September 28, up from 1.7 million of new-crop soy exports on September 28, 2006, according to the Agriculture Secretariat.

 

Exporters must make a sworn declaration to the government of an export sale before shipping the goods. A reference price for tax purposes and the applicable tax rate are locked in once the company declares a shipment.

 

Soymeal export commitments for 2008 were at 4.5 million tonnes compared to 609,250 tonnes a year earlier.

 

"The increase and pace of the export declarations is for sure in anticipation of an increase in the export tax," Roagro analyst Carlos Boglioli said.

 

The pace of export declarations has increased dramatically over the past week as speculation over the export taxes has heated up.

 

In the last 10 days, 40 percent of all the export declarations for the 2007-08 new crop have been made, according to business daily El Cronista. However, the export declarations to date represent just 20 percent of estimated 2007-08 production, according to El Cronista.

 

Despite rising bean and meal export commitments, soyoil export declarations for 2008 were down on the year, at 555,600 tonnes compared with 714,562 tonnes on the same date last year, according to the Government.

 

While there has been no official word from the government regarding an increase in the export tax, local press reports were fuelling speculation, according to the director of economic research at the Argentine Oil Industry Chamber, or CIARA, Alberto Rodriguez.

 

"These export sales are based on individual decisions by the companies," Rodriguez said.

 

Argentina is the third-largest soy exporter in the world following the US and Brazil. Argentina leads international soymeal and soyoil exports.