July 25, 2008

 

Argentina demands retroactive grain taxes from exporters
 
 

The Argentine government is demanding retroactive taxes from exporters who declared sales of 17.78 million tonnes of cereals and oilseeds before a November hike in grain export taxes, according to a resolution published in the Official Bulletin on Thursday (July 24, 2008).

 

The move adds to the 6.22 million tonnes of soy export commitments that were invalidated on July 1 because exporters were unable to show that they had already purchased soy on the local market before making export commitment declarations.

 

Argentine grain prices were mostly lower on the week at the Rosario Grain Exchange as many exporters withdrew from the market after the government's announcement.

 

In December, Congress voted to invalidate grain export declarations made prior to a November increase in the export tax if the exporters could not show they had already purchased the goods for shipment.

 

Grain export taxes were hiked again in March, infuriating farmers, who launched a series of crippling strikes to protest the new sliding-scale tax.

 

The government rolled back the March increase last week after the Senate refused to endorse the sliding-scale tax plan.

 

The retroactive tax law aims to prevent exporters from avoiding higher export taxes in place when they actually ship goods.

 

In November, the export tax on soybeans was raised to 35 percent from 27.5 percent.

 

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

 

"While (the government move) was foreseeable, the reaction from the exporters was a surprise as they looked to get out of the market," said Roagro analyst Carlos Boglioli.

 

"The fact that some of the exporters were not included in the list of companies involved prevented the total paralysis of the market, but prices suffered," Boglioli said.

 

Soy


"Soy prices reflected a drop at the Chicago Board of Trade, in addition to uncertainty regarding future exports. There were very few buyers interested in closing deals," the Rosario Grain Exchange said.

 

Spot soy was traded at ARS 950 a tonne in Rosario on Thursday, down from ARS 970 on Monday.

 

May 2009 soy traded for US$290 a ton, down from US$308 on Monday.

 

Corn


Spot corn was traded at ARS 460 a tonne in Rosario on Thursday, up from ARS 440 on Monday.

 

April 2009 corn sold for US$158.60 a tonne, down from US$166 Monday.

 

Wheat


Exporters paid ARS 500 a tonne for spot wheat in Rosario, while local millers paid ARS 660 a tonne for wheat with a minimum gluten count of 26.

 

January 2009 wheat was traded for US$187.50 a tonne on Thursday, down from US$201 on Monday.

 

US$1 = ARS 3.016 (July 25, 2008)
Video >

Follow Us

FacebookTwitterLinkedIn