UPDATE 1-Argentina planning temporary cut on soy export taxes -farm industry source

(Adds economic background)

BUENOS AIRES, Oct 1 (Reuters) – Argentina plans to temporarily cut soybean and soymeal export taxes by 3 percentage points to 30% to help stimulate export revenue as the country struggles with recession and dwindling foreign reserves, a local industry source said on Thursday.

The tax cut, expected to be announced later on Thursday, would last until the end of the year. The export levy would be restored to 33% in January, said the person, who has direct knowledge of the situation.

“The government is working on different measures but there has not been any negotiations with the farm sector in this regard. So the government will take unilateral measures on soybeans and soy byproducts,” the person said.

“They will reduce export taxes by 3% (points) for the rest of this year and restore export taxes to their current levels in January,” the Buenos Aires-based source said. “The government is expecting that this will induce farmers to increase selling but we are not sure about that.”

The economy ministry did not immediately respond to a request for comment.

The economy of Argentina, in recession since 2018, has been slammed by COVID-19. The central bank has tightened capital controls in a bid to shore up reserves as Argentines dump the peso in favor of safe-haven U.S. dollars.

Soybeans are the main cash crop of Argentina. The country, also a major exporter of corn and wheat, is the world’s top supplier of soymeal livestock feed used to fatten hogs and poultry from Europe to Southeast Asia.

Last year Argentine soy and its derivatives fetched $15.7 billion in export dollars.

Local media were filled with reports about talks between farmers and government officials regarding a possible export tax cut. But the Argentine Rural Confederation, a major growers’ organization, issued a statement saying it had not participated in any discussions.

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