BUENOS AIRES, ARGENTINA — The Argentine government recently announced plans to gradually reduce soybean export taxes, according to a Jan. 11 Global Agricultural Information Network (GAIN) report from the Foreign Agricultural Service of the U.S. Department of Agriculture (USDA).

Coming into this year, the export tax for soybeans was 30% while the tax for soybean oil and soybean meal was 27%. According to the report, the government announced it will lower these taxes by 0.5 percentage points every month beginning January 2018 until December 2019, lowering the tax by 12 percentage points overall.

The tax for soybean exports at the end of this period will be 18% for soybeans and 15% for soybean oil and meal, the report said.

“This gradual reduction has generated much speculation over whether producers will store more of their harvest than usual,” the GAIN report said. “Local analysts believe this gradual reduction, coupled with the expectation of further devaluation of the Argentine peso, will give greater incentive to producers to hold back supplies.

“Post’s current stock estimates appear to support such a conclusion, but there is much debate over the specific volume of additional stocks. The majority of these stocks are held by small and medium producers, as local sources report that large producers have already liquidated their stocks. Producers will likely sell off all their corn and wheat supplies first before they tap into their soybean supplies to cover this season’s production costs or other expenses.”