Buenos Aires, December 15, 2019. Four days after taking office, last Saturday the Fernandez Administration passed Decree 37/2019 updating the export taxes. The decision was based on Decree 793/2018, by which the former administration re-installed the export taxes in September 2018. On that occasion, pressed by an economic downturn, the former President Macri decided to apply a duty of AR$4 per dollar over exported raw materials and AR$3 per dollar over exported industrial products. For the soybean complex, a floor of 18% over the FOB price was added to the AR$4.
At that moment, the duty represented around 10.8% of the FOB prices and 28.8% for the soybean complex. During the following months, the IMF pressed the Macri’s administration to convert this fix duty into a percentual one, but in an electoral year, Macri decided not to update the duty since the farmers were part of the supporters of his government coalition Cambiemos.
After primaries, August 11, the dollar jumped from AR$40 to AR$60. Then, the relative weight of the duty went down to 6.70% of the FOB prices for main grains (corn, wheat, barley) and 24.70% for the soybean complex. “Clearly, this was an untenable situation, since the Administration was losing fiscal resources. Even if Macri had been reelected, he would have had to update the export taxes”, a source of RIA Consultores told to eFarmNewsAr.com.
But Fernandez won and four days after taking office, he updated the export taxes. From now on, all grains will pay 12% of the FOB price, while the soybean complex will pay 30%. The update represents a 5.4% point increase. Meanwhile, manufactured goods will pay 9% of the FOB price.
Even though everybody in the farming economy took this update for granted, farmers’ leaders linked to the Cambiemos opposition are fueling protests and rallies against the Government. They are calling for a huge demonstration in front of the National Congress next Wednesday 18.