Category Archives: Policy

Paraguay wants export taxes on grains, including corn, soybeans, and wheat

The government of Paraguay has already sent a bill to the Paraguayan Congress that would impose taxes at a rate of 15 percent for all grains exported from the country. President Horacio Cartes believes he has enough votes to approve the measure in an agreement with the leftist opposition. Paraguay, today, is the fourth largest exporter of soybeans in the world with 6.3 million metric tons shipped. The argument of the Paraguayan government is that the agricultural sector has a revenue of over US$ 3 billion, but contributes less than other sectors of the economy. This year alone, the soybean output in Paraguay overcame 10 million metric tons.

In December of 2015, Argentina eliminated export taxes on wheat and corn. The result of the elimination was the doubling of wheat production and generating a growth of two percentage points of corn production. A program of reduction of export taxes on soybeans until its elimination in 2019 was also set.

Brazilian govt releases US$ 58 billion on credit loans, price support programs for farmers

The Brazilian version of the farm bill, called locally as Plano Safra (Crop Plan), was announced today (07.06) and the total amount available was R$ 188.3 billion (almost US$ 58 billion). The amount provided is lower than what was available during the 2016/2017 season if inflation is considered. The investment in the previous crop was R$ 185 billion.

By far, the largest percentage of the plan is put on credit subsidy programs. The total amount used in that is R$ 150 billion. Of this total, R$ 116.26 billion will be used on loans with controlled interested rates and R$ 34 billion with regular interest rates.

“We are here to reaffirm our unequivocal support to Brazilian agriculture. The farm business is synonym of efficency,” said Brazilian president Michel Temer at the lauch of the program.

Trump Considers Allowing In Argentine Biodiesel, Beef

By Luís Vieira

U.S. President Trump has conditioned the entrance of Argentinian biodiesel and beef into the American market.

In May, the U.S. officially announced that it suspected antidumping of Argentinian biodiesel, and it would suspend those biodiesel imports until it ends an investigation.

Separately, Argentina’s beef had a prior allowance for imports set by the Obama administration, but it is now under revision by Trump’s White House.

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After Macri visit to the White House, biodiesel issue still unresolved

After the president of Argentina, Mauricio Macri, visited the president of the United States, Donald Trump, there was an announcement that restrictions of Argentinian lemons exports to Americans will be lifted. On the other hand, there was not a public statement on the investigation of possible dumping on Argentinian biodiesel exports that would begin in May. Therefore, the issue remains unresolved for Argentina.

Brazil: meat exports see sharp fall after scandal

As a result of the Federal Police investigation that discovered a tainting scandal, the meat exports from Brazil dropped from US$ 60.5 million on Monday to US$ 74,000 yesterday. This morning, a new country announced that will block the entrance of Brazilian meat: South Africa.


Maggi: Brazil will lose 10% of meat market after tainting scandal

After a Federal Police investigation that discovered meat tainting by several meat packers in Brazil, Japan, the European Union, Mexico, Egypt, Hong Kong, China and South Korea announced a blockade of any meat imports from the country. Brazil’s Agriculture minister, Blairo Maggi, said today that the country could lose up to 10 percent of the market share. “It could take Brazil up to five years to recoup its market share,” he told a Senate committee.

Mexico is prepared to source South American corn

By Luís Vieira

The Mexican government would seek other agricultural suppliers in the case that President Trump fulfills his promise of imposing a major border tax of 20% on Mexican products in order to pay for a border wall.

This could mean a significant lost of market for U.S. farmers, including beef, poultry, hog, corn, soybeans, rice, and others.

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Brazil’s Abiove wants quotas for Brazilian soybean meal in five Asian countries

The Brazilian Association of Vegetable Oil Industries (Abiove) has revealed that it intends to negotiate quotas of soybean meal exports with five Asian countries: China, Vietnam, Thailand, Myanmar, and South Korea. “We want to sensitize the Asian governments to put quotas of added value in their imports,” said the president of Abiove, Carlos Lovatelli, in a statement.

By that measure, the industry seeks to guarantee a greater supply of soybean meal in Brazil in the coming years. In three years, the biodiesel mixture would jump to 10 percent, which would generate 400,000 tons more of soybean oil demand. “The volume of meal will increase due to the level of oil for biodiesel. There will be more meal and we have to export it,” explains Lovatelli.

According to Abiove, there already was some talks ongoing with China and the country may establish a quota of five million metric tons. The soybean meal production in Brazil has reduced 3.4 percent this year to 29.7 million metric tons with exports dropping to 14.3 million metric tons, which is 3.35 percent less. This happened because of less domestic demand for meat, especially poultry. In the view of Abiove, the situation tends to improve in 2017.

If Trump goes protectionist against China, Brazil and Argentina would benefit

Most analysts agree that in an eventual protectionist wave of the next president of the United States, Donald Trump, China could react by putting import taxes on U.S. grain or just not buying so much U.S. corning, seeking another suppliers such as Brazil, Paraguay and Argentina. Dave Holloway, a trader from the state of Michigan, it could be a problem for the United States if Trump confirms this policy. As candidate, he mentioned a possibility of 35 percent tariff on Chinese products, which was later denied.

“If Trump puts in practice this fight, the prices would increase and three countries [China, Japan and Mexico] would go to Brazil. We are not the only store in town. The Chinese would be happy to help the Brazilian infrastructure,” affirmed Holloway.

For Darin Fessler, a broker from Lincoln, Nebraska, says that “only time will tell about the ability of Trump to negotiate with China or Japan. I think there could be some good changes made to the manufacturing sector and currency side of things,” Fessler told AgroSouth News.

Corroborating with these opinions, Brazilian market analyst Antonio Sartori from BrasilAgro says that is more likely that Trump goes with complaints to the World Trade Organization against China, but that could suffer retaliation too. “China has spent US$ 100 billion with subsidies for corn, wheat and rice growers and this is out of the rules, “concludes Sartori.

President of Argentina confirms that cut on soybean taxes will be delayed

In a meeting with local rural leaders, the president of Argentina, Mauricio Macri, has confirmed he would not be able to reduce export taxes on soybeans in 2017 once again. In December of last year, Macri reduced the export taxes from 35 percent to 30 percent with the promise of reducing five percentage points by each season. Macri justifies the decision arguing that the federal budget will end the year in red with a growing fiscal deficit.  The Argentinean president may do a public announcement justifying the decision for the general public later today.