February 5, 2021

 

Argentina may increase grains export taxes to control inflation

 


Cecilia Todesca, Argentina's President's Deputy Chief of Staff, said the government may increase grains export taxes to control the country's high inflation, Reuters reported.

 

Todesca said in a radio interview with El Destape that Argentine President Alberto Fernandez will be discussing with farmers and agro-exporters to find ways to avoid a surge in domestic food prices.

 

In January 2021, the Argentine government announced plans to restrict corn exports as a way to reduce domestic food prices, but it was met with protests from the country's agriculture sector.

 

Those in Argentina's agriculture industry said export restrictions would negatively affect investments and farm production, especially now when the country's central bank needs export dollars to restock its foreign currency reserves.

 

Corn and soybean prices have surged to record levels in recent months. Argentina is the biggest exporter of soymeal livestock feed and the third biggest exporter of corn.

 

Todesca said the government does not have many tools and will have to use everything they have to rein in Argentina's inflation.

 

Consumer prices in Argentina have increased above 36% in 2020, resulting in economic issues for the Argentine public already hit by a recession that began in 2018 and other COVID-19 related problems.

 

- Reuters