Jorge Iorio & Eliana Raszewski

BUENOS AIRES, (Reuters) Argentina announced on Sunday that it had stopped registering export sales of soybean oil and meal. This was quickly condemned by the South American country’s government. Argentina is known for being the top exporter in processed soy products.

Although the move has stopped sales and exports from the crop of 2021/22, physical shipment have not yet begun as no harvesting took place. Argentina is the largest global exporter both of soybean oil and meal. This will undoubtedly exacerbate the soy market in the world, where prices have risen since Russia invaded Ukraine.

U.S. soybean futures rose more than 2.2% after the announcement. Soyoil futures fell 1.26%.

According to NABSA, Argentina had 1.5 million tonnes of meal exports per month and 300,000. tonnes soy oil. This figure was for 2021.

According to U.S. Department of Agriculture estimates, 41% of all global soymeal imports will be from the country and 48% of soy oil world exports will come from the country in 2021-22 crop years.

According to a statement by the sub-secretary of agriculture markets, export registrations for soybean oil, soymeal, and related products will be stopped immediately. This comes before the start of the 2021/22 crop in just a few weeks. According to government data, 5 million tonnes and more of the soy products from the 2021/22 campaign were formally exported.

According to the local CIARA chamber representing oilseed processors, exporters and traders, export registration was closed because of claims that the government wanted tariffs increased “by two percentage points”.

The chamber stated on Twitter that “it is completely contrary to Argentina’s export interest.” “In addition, this is illegal. It will impact the income of foreign currencies and the employment in #agroindustrial.

Though export tariffs have been a source of conflict with exporters and farmers for some time, the government did not mention them in their statement. Due to high debts the government requires income in dollars and taxes from soy, Argentina’s most important export.

Argentina currently taxes soy oil and meal exports at 31%. Although the country’s soy crops for the 2021/22 year are estimated to be between 40-42 million tonnes and was severely affected by the drought in the beginning of the year, they still have a lot left.