Argentina suspends soybean exports as prices rise

Argentina's government announced it had suspended exports of soybean flour and oil amidst rumours it is planning to hike taxes due to soaring primary material costs blamed on Russia's invasion of Ukraine.

One expert said the export freeze was likely a measure to prevent firms registering future exports before the tax rise comes into effect.

The South American country is the world's largest exporter of soybean flour and oil. Soybean products made up 30 percent of Argentina's exports in 2021, worth nine billion dollars to the government.

The agricultural markets undersecretary, a division of the agriculture ministry, said in a statement that these exports were suspended "until further notice."

In 2021, soybean flour was Argentina's largest export (14.2 percent) with soybean oil its third biggest (6.9 percent).

Industry sources claim the government is analysing the possibility of increasing export tariffs on those two products to 33 percent from 31 percent.

That could be worth $450 million to the government, which needs all the money it can get to pay off a $44 billion debt with the International Monetary Fund.

"The closure of exports is done to prevent businesses from registering (sales) before the tax modification," analyst Dante Romano said.

"But it should last just a short time and should not affect the international market."

Romano said the move is merely aimed at maximising government revenue and should not limit exports.

It comes as the cost of primary materials around the world has increased as a consequence of Russia's invasion of Ukraine and sanctions imposed on Russia by many Western nations.

There are worries this could provoke an increase in food prices in Argentina which would send inflation soaring in a country that already has one of the highest rates in the world (over 50 percent in 2021).