IARN — There continues to be talk that Argentina is considering an export tariff, which would likely mean less corn and soybeans available from the country to the rest of the world.
Allendale commodity broker Greg McBride says the Argentine government is looking to limit export supplies to keep inventory in country and slow down inflation.
“We’ll continue to monitor the tax situation for Argentina, whether it’s the export tax or the import tax,” said McBride. “It gives us an opportunity to see potential for more demand out of the United States. Demand obviously has been very good. We have tight supplies. The concerns about Brazil’s corn crop does factor into our own tight supply window and gives us a reason to believe that we will see global corn prices continue to go higher.”
Argentina already imposes a 33 percent tax on international soybean exports, 31 percent on soybean meal and soybean oil, and 12 percent on corn and wheat. Reports say this is the second time this year that the Argentine government has made plans to increase export taxes.
“I think at this point we are going to have to see some sort of a supply situation here in the United States to continue to warrant the prices we have right now,” said McBride. “As we’ve seen over the last few weeks since that March 31st report, we’ve seen corn and bean prices skyrocket. We are a little bit overvalued based on where our current ending stocks are. We do get an update from USDA next week. Maybe that will come back closer to in-line with what the prices are reflecting at this point, which would be sub-one-billion-bushel carryout for corn.”
In Argentina, the farm sector has pushed back against the government’s tax hike proposal.
Story courtesy of the Iowa Agribusiness Radio Network
Image source: Wikimedia commons
