By Maximilian Heath
BUENOS AIRES, Sept. 25 (Reuters) – Argentina’s declared soy exports for the 2024/25 season hit a seven-year high after a brief pause in export taxes triggered a trading frenzy, which should continue to boost the market as many exporters declared sales before buying the goods.
Argentina is set to export 10.5 million metric tons of soybeans from this season’s harvest, according to government data, ahead of the previous record of 10.1 million achieved in 2018/19. Available official records go back to 2017/18.
The Agriculture Secretariat did not immediately respond to a request for comment on whether this season’s declared soy sales represent an all-time high.
Argentina, one of the world’s top grains suppliers, relies on the agricultural sector to generate foreign currency. The tax pause aimed to accelerate sales abroad and secure much-needed dollars to stabilize its flagging peso currency.
Monday’s suspension of export taxes on soy, corn, wheat and their by-products, including biodiesel, was set to last through the end of October or until declared exports reached $7 billion.
Soy exports typically carry a 26% tax.
A separate tax suspension on beef and poultry products, also launched earlier this week, will continue through the end of October, without a sales cap, presidential spokesman Manuel Adorni said on Thursday, with no sales quotas attached.
A Brief Frenzy
The tax pause notably boosted Chinese appetite for the grain, which has jumped in recent months as its trade war with the United States pushes buyers to seek suppliers elsewhere.
Meanwhile, sources told Reuters that India had during the tax pause bought 300,000 metric tons of Argentine soyoil, its largest ever purchase in a two-day period. These are expected to be shipped in October to March.
“It was like a brief frenzy,” said Johnny Xiang, founder of Beijing-based AgRadar Consulting. “Domestic buyers were drawn by the low prices and made large purchases of soybeans mostly for November shipment.”
Santiago del Solar, a top Argentine farming leader, however, blasted the government measure as chaotic and sloppy.
“Setting export duties at zero percent from one day to the next created a tremendous bottleneck,” he said, highlighting that this had put pressure on prices.
Argentine export companies pass on the taxes they pay the government in the prices they offer farmers.
“The $100 per metric ton of soybeans in duties initially hit $60, then $50, and then $40,” said del Solar. “As a precedent, it’s very bad because we’re thinking that they’re going to do it again next year.”
Argentina’s grains market is expected to remain active even as taxes return, as companies were able to declare foreign sales in anticipation, before buying the goods themselves.
“Buyers, mainly of soybeans, have to continue sourcing goods because they declared many sales but have not fully purchased those goods,” said agribusiness expert Lorena D’Angelo, who works in the major grains port city of Rosario.
Because of this, D’Angelo said, prices will likely remain above their level before the government paused export taxes, and although trading should slow down considerably the market should nevertheless remain busy.
Soybeans were trading at $340 per ton on Thursday, down from $348 the day before but well above last week’s level of around $300.
(Reporting by Maximilian Heath; Editing by Sarah Morland, Kylie Madry, and Diane Craft)
