(Adds reaction from agricultural trade group in paragraph 5)
BUENOS AIRES Oct 3 Argentina will not reduce
soy export taxes this year or in 2017 as previously announced
and will instead reduce the tax by 0.5 percentage points per
month from January 2018 to December 2019, President Mauricio
Macri said on Monday.
Shortly after taking office in December, Macri eliminated
corn and wheat export taxes as part of his plan to revitalize
the country's massive farm sector. He cut the export tax on soy,
the country's main cash crop, from 35 percent to 30 percent, and
the government had planned further cuts beginning this year.
In September, cabinet chief Marcos Pena told Reuters the
government was considering postponing the reduction planned for
the end of this year, as recession in Latin America's third
largest economy ate into fiscal revenue and the government
anticipated difficulties meeting planned budget cuts.
Macri's center-right government has pledged to rein in
public spending after the previous government's generous social
programs contributed to a ballooning deficit. Last month, the
government announced a 2017 budget with a fiscal deficit worth
4.2 percent of GDP, higher than the 3.3 percent previously
Coninagro, one of Argentina's largest agricultural trade
groups, said that while it generally opposes export taxes, "it
is necessary to accept the government's proposal" to postpone
the tax cuts in light of the country's difficult economic
The new soy tax plan will include a 5 percentage point
rebate to producers in the country's northern provinces - which
does not include the country's main soy belt - to account for
their higher transportation costs, Macri said earlier on Monday.
The government decided to reduce the tax gradually month-by
month rather to prevent "speculation" amid concern farmers would
hold off on planting and harvesting until the tax was reduced,
Agriculture Minister Ricardo Buryaile said on Monday.
"Surely there would have been a significant holding-back of
the crop" if the government announced a larger annual tax cut,
Argentina is the world's third-largest producer and exporter
of soybeans after the United States and Brazil, according to the
U.S. Department of Agriculture. It is expected to produce 57
million tonnes of soybeans and export 10.7 million tonnes in the
2016/17 crop year, which began this month.
The country is also the world's top exporter of soybean meal
and soybean oil. Macri's government lowered export taxes on
those products by 5 points to 27 percent last year.
(Reporting by Luc Cohen and Maximiliano Rizzi; Editing by
Cynthia Osterman and Diane Craft)