Soybean oil and flour withholding increase: Government would raise only $425 million extra

A report from the Buenos Aires Grain Exchange noted that an increase in oil and soybean meal withholdings of 2 percentage points would have a smaller fiscal impact. Based on the foreign sales affidavits that have already been issued, revenue could be increased by $425 million, an additional 5% to the total revenue for this crop chain tribute estimated at $9 billion by 2022. Of the total that would be raised extra, 265 million would be flour and the remaining 160 million would be oil.

For the 2021/22 campaign, where the new withholding scheme will affect soy by-products, exports of soybean meal are projected for 27.5 million tons and oil for 5.8 million tons. However, since 3.9 million tons of flour and 1.1 million tons of oil are already withheld and the respective duties have been taxed, that is why the extra money to be collected will be less.

It was also clarified in the report that for this increase in tax revenue to materialize, “the pace of soy marketing should not be affected. The soybeans that will be industrialized this season are still in the unharvested fields, and any change in the rules of the game after planting decisions were made affects marketing behavior.” In this regard, it was detailed that so far 21% of the estimated production for the 2021/22 cycle has been marketed, when at the same time last year marketing reached 26%.

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