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.