(Argentina) Argentina temporarily lowers export taxes on soybeans, wheat and other agricultural products

The Argentine government announced on January 23 a temporary reduction in export taxes on major agricultural products. The measures will be implemented from January 27 to June 30 in accordance with Decree No. 2025. This is the latest move by the Millet government to fulfill its campaign promise to cut taxes and deal with drought in agricultural areas and low international food prices.

Specific adjustments include: soybean export tax from 33 per cent to 26 per cent, soybean meal and soybean oil from 31 per cent to 24.5 per cent, wheat, corn, barley and sorghum from 12 per cent to 9.5 per cent, sunflower seeds from 7 per cent to 5.5 per cent; and the permanent abolition of export taxes on regional agricultural products such as sugar, cotton, peanuts, rice and leather.

Argentina is the world's largest exporter of soybean oil and soybean meal and an important supplier of wheat and corn. Export taxes (locally known as "retenciones") have always been an important source of government revenue and are at the heart of the conflict between agricultural groups and successive governments. This tax cut comes at a time when the peso is under pressure and farmers are holding money to sell. The government hopes to reduce the tax burden to promote sales, speed up the settlement of foreign exchange, and ease the pressure on the balance of payments.

The industry has mixed reviews: exporters and farmers welcome the improved cash flow brought about by the lower tax burden, while the financial sector is concerned about the revenue gap. The market is also concerned about the continuation of tax cuts-Argentina's agricultural policy has been adjusted repeatedly in recent years, and farmers' sowing and sales decisions will continue to swing with policy and exchange rate changes.

Source: Decree No. 2025 of the Ministry of Economy of Argentina; Economic and Commercial Office of the Chinese Embassy in Argentina; USDA FAS, January 2025.