The soybean complex and the incredible “add-value punishment” policy

(Photo: Alberto Padoan, chairman of the BCR strongly criticized the measure)

Buenos Aires, November 20th. After the President Macri’s Administration decided to eliminate the export tax gap between the soybean and its by-products, and to increase them adding AR$4 per dollar exported (in the case of soybean) and AR$3 in the case of the oil and the meal, the Rosario Grain Exchange (BCR) released a study about the impact of this measures on the export of the soybean complex.

According to this study, when soybean will harvested in the May 2019, both the bean and its by-products will pay 26.8% of tax export, versus 21.5% for beans and 18.5% for soymeal and soyoil if the original reduction plan would been vigent.

The BCR shows that while the exporters will pay about US90 dollars per tonne of soybean exported, the industry that puchase the grain to crushing and export the by-products will pay US$100 per equivalent soybean tonne. “We can asserve that it is not real the afirmation that the same export tax implies more competence between the industry and the exporters, because add-value products finally pays a higher export tax”, the BCR says.

“This policies reduce the competitiveness advantage of the crushing industry and negatevely affect all the soybean value-chain. Argentina needs a pro-industrialization policy in its exports, particullarly in the soybean complex, the largest in the country. By this reason it is necessary to change this anti-industry policy”, the BCR concludes.

The BCR explains that the importers countries applies larger import duties to the added-value products than the raw material. For example, China imposes a 3% import duty to sobyean, versus 9% to the oil and 5% to the meal. Also, Egypt applies 0% to soybean but 5% to soymeal. A major trend to export the grain instead the by-products could reduce the crushing activity next season.

Access to the complete report (in Spanish)

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