Argentina farmers increased the forward selling of soybeans in the last four months of 2019 in an effort to avoid higher export taxes that are now in effect, according to a Global Agricultural Information Network report from the U.S. Department of Agriculture.
Figures released by the Argentine Ministry of Agriculture show that as of Dec. 18, 2019, exporters had registered 5.52 million tons of forward sales for export of the 2019-20 soybean crop. In comparison, exporters only had registered 588,000 tons of forward sales for export of the 2018-19 soybean crop by the same time in December 2018.
“After rebuilding balance sheets through these forward sales (for export and crush), farmer selling is expected to slow,” the USDA said.
“Currency controls that prevent farmers from converting Argentine pesos to U.S. dollars will lead farmers to sell only when local currency is needed to purchase inputs or settle debts.”
USDA noted that soybean crushers are advocating for the return of a differential export tax or other mechanism to favor the export of soy products over whole beans.
Exports are projected to decline from 9.1 million tons in 2018-19 to 8.2 million tons this year, according to the USDA.
The report said 2019-20 soybean planted area in Argentina is forecast at 18 million hectares and production is pegged at 53 million tons, both unchanged from a September 2019 estimate.