Argentina may near Black Sea leaders of the sunflower oil market

To prevent farmer strikes, Argentina’s government has decided to raise export tariffs solely on certain agricultural products. It was announced on March 3 that those on corn and wheat would remain at 12%. At the same time, according to a law adopted in December 2019, the government reserves the right to increase duties on these grains to 15%.

For now, the export duty increase has only concerned soybeans and soybean products. Export tariffs on all soybean products were lifted by 3%, to 33%. However, the market was surprised by a cut in export duties on sunflower seed and sunflower oil to 7% and 5%, respectively. Previously, the duty rates for sunflower seed and products used to be equal to those for grains.

Farmers in the country have not yet finished the 2019/20 sunflower harvest – it is just 36% complete (33% on average in five years). However, the market has already begun speculating that the sudden cut in tariffs may lead to larger sunflower plantings for MY 2020/21 and higher sunflower oil exports, UkrAgroConsult reports.

As a reminder, Argentina was a major exporter of sunflower oil before MY 2005/06, but yielded its top position to Ukraine because of high export tariffs.