In a Nov. 2 conference call with analysts to discuss third-quarter results, Juan Luciano, chairman, president and chief executive officer of Archer Daniels Midland Co., said the company saw a period of increased competitiveness of Argentine meal during the quarter, a factor he said contributed to lower oilseeds results for the Chicago, Illinois, U.S.-based company.
In the question-and-answer portion of the conference call, Luciano described the actions in Argentina as “a fluid situation.”
“Certainly there was some discussion about the ability of the government to continue to reduce these export taxes in Argentina,” Luciano said. “The government finally announced that it will not have the ability to honor that promise. But they also created some reductions for some provinces in the north, to kind of balance the people that are farther away from the ports.
“So I would say this is going to be a fluid situation. … The intention of the farmer has been to shift to corn some acreage in Argentina; but early planting conditions are maybe making it a little bit more difficult to do that, and some people have started to plant some soybeans.
“So I think it’s a fluid situation. And for the time being, we’re going to expect North America to be the competitive sourcing of soybean meal in the world, until we have the next South America crop.”Beginning January 2018, the Argentine government has said the export tax will be reduced by 0.5 percentage points each month until December 2019. By the end of 2019, the soybean export tax will be 18%, down from its present level of 30%. In addition, Argentinian President Mauricio Macri said the government plans to bolster soy production in 10 Northern provinces by providing a refund equivalent to 5% of the free on board price (FOB) price of soybeans beginning in March 2017.