December 5, 2008

Argentina reduces corn and wheat export taxes


Argentina's government cut export taxes on corn and wheat on Thursday (Dec 4, 2008) as part of a plan aimed at boosting exports.


Argentina is the world's second biggest corn supplier after the US and was the fourth largest wheat exporter last year. However, this year's harvest will be far smaller due to a prolonged drought.


Argentine President Cristina Fernandez said export levies on both crops would be cut by five percent. That would bring the export duty on corn to 20 percent, while wheat taxes will be reduced to 23 percent.


Besides being key crops in Argentina, they are important exports and are also fundamental for sustaining the domestic market, she said.


Fernandez also outlined a new mechanism by which wheat and corn export taxes would be cut by one percent when production exceeds an average harvest by 1 million tonnes.


The USDA expects the South American country to produce 18 million tonnes of 2008/09 corn and 11 million tonnes of wheat.


Farmers are currently harvesting wheat and most of the corn crop has already been planted.


Argentina's farmers staged a four-month wave of strikes and protests against a tax hike on soy earlier this year, and the government was forced to roll back the increase when it was defeated in Congress.


Fernandez made no mention of a reduction in export taxes on soy, the country's top crop, which stand at 35 percent.


Farmers have been calling for lower levies on grains shipments due to falling international prices. Soy prices have slumped by about 50 percent since record highs in July.

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