The government confirmed the increase from 31% to 33% of soybean meal and oil retentions and the creation of a Wheat Stabilizer Fund. But it confirms that it will not touch the other retentions.
The Minister of Agriculture, Livestock and Fisheries, Julian Dominguez, reiterated that the Government does not contemplate a rise in the retentions of exports to soybeans, wheat and cornas was done today with the flour and soybean oil.
At a press conference, Domínguez affirmed that the necessary measures will be implemented “to stabilize the price of wheat at pre-war values, while the consequences of the increase due to this war last” between Russia and Ukraine.
The Minister of Agriculture He stressed that the increase in withholdings “will not affect producers” and explained that “eleven exporting companies” of soybean meal and oil will be covered by the measure.
“The measure establishes the temporary suspension of the differential of two percent of the soybean meal and oil export duties of decree 790/20. The suspension of these export duties will make them return to 33%, a percentage that the companies already they discount the producer”, the national official said.
At a press conference, the head of the agrarian portfolio stressed that “Producers will not be affected by this measure, since they pay the aforementioned percentage.”
And he detailed: “This measure reaches eleven exporting companies of their soy product, of which eight represent 95% of total exports.”
“Regarding the Argentine producers that have caused a record wheat harvest, we have decided, in order to capture the international prices of this historical situation, to open the export records of the 22/23 harvest for a total of 8 million tons of wheat. , which are added to the 2 million tons already authorized,” said Domínguez, alluding to the increase in the value of this cereal due to the Russian invasion of Ukraine.
And continued: “With this decision we intend to achieve the objective of giving producers predictability for the next wheat planting and achieving a new production record.”
The full statement of the Minister of Agriculture at a press conference
As is known, the war conflict involves two countries that are leading producers and exporters of cereals, and in particular of wheat. In the case of wheat, they represent 28% of global trade. The war between Russia and Ukraine has had a great impact on its price, in a market that was going through a bullish cycle.
This situation, which affects humanity, was transferred to Argentina, which is also an exporter of wheat. Prices in our country experienced a rise of 37%. Which took, in a few days, the domestic price from $25,000 to $35,000 a ton. The increase was transferred to the price of flour and, consequently, to that of bread and all derivatives.
Given this scenario, the President of the Nation entrusted me to implement these necessary measures to stabilize the domestic price of wheat at pre-war levels, decoupling them from international prices, with the fundamental objective of defending consumers without harming producers.
That is why we have decided to create a Temporary Stabilizing Fund for Argentine Wheat. The instrumentation and administration of this Fund will be EXCLUSIVELY in charge of the Secretary of Domestic Trade, which will establish a trust fund for that purpose.
The measure establishes the TEMPORARY SUSPENSION of the 2% difference in export duties for soybean meal and oil, from decree 790, for the year 2020. These export duties will return from 31% to 33%.
I want to reiterate that producers will not be affected by this measure since they pay the aforementioned percentage.
The measure will reach 11 companies that export soybean by-products, of which 8 represent 95% of total exports.
We have also decided, in order to capture international prices, to open export records for the 22/23 harvest, for a total of 8 million tons of wheat, in addition to the 2 million tons already authorized.
With this, we intend to achieve the objective of giving producers predictability for sowing wheat and achieving a new production record, reaching 25 million tons.
The world crisis affects us, but it also puts us before the challenge of reinforcing our commitment to global food security, producing more and in a more sustainable way.
All the efforts of our portfolio will be focused on achieving those objectives.
The Government reestablished 33% withholdings on soybean meal and oil and created a fund to stabilize wheat
The Government confirmed the increase from 31% to 33% of withholdings for soybean meal and oil and the creation of a Wheat Stabilizer Fundwith the intention of controlling domestic prices, after President Alberto Fernández declared a “war against inflation” in the country.
Through two decrees published in the Official Gazette, the government made the increase in withholdings official, suspending until December 31 a 2020 decree that reduced export rates for soybean meal and oil to 31% and re-established the value of 33%.
In another decree, the government announced the creation of a fund “with the aim of stabilizing the cost of a ton of wheat purchased by Argentine mills.”
Argentina is the world’s leading exporter of soybean oil and meal. An increase of two points in the tax would imply an additional fiscal collection of 425 million dollars for the Government of Alberto Fernández, according to a report from the Buenos Aires Cereal Exchange (BdeC).
Latin America’s third-largest economy has suffered from a high rate of inflation for years, reaching 52.3% year-on-year in February, and has barely begun to recover from three years of economic recession.
“Inflation is a historical phenomenon in Argentina, almost a curse that many of us have grown up with. It has been a recurring alley that seems impossible to get out of,” Alberto Fernández said in a television message on Friday night.
Revenues from taxes on shipments of agricultural and agro-industrial products are a very important source of resources for the Argentine Government. Argentina also taxes shipments of wheat and corn, at 12%.
In another decree, the government announced the creation of a fund “with the aim of stabilizing the cost of a ton of wheat purchased by Argentine mills.”
The official policy for agriculture confronted the Fernández administration with agricultural producers, who maintain a historically tense relationship with the Peronist governments due to the tendency of the latter to intervene in the markets.
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