To attract dollars, there will be zero withholdings on grains until five days after the elections.

In a significant move amid the escalating exchange rate and a strong political impact in the final stretch toward the October legislative elections, the national government announced the temporary elimination of withholding taxes on grain exports .

The measure was confirmed Monday morning by presidential spokesman Manuel Adorni and will be in effect until October 31, that is, five days after the elections.

The package includes the country's main crops ( soybeans , corn , wheat , sunflowers and other grains) and its main objective is to accelerate the inflow of foreign currency to the Central Bank, which is going through critical weeks with net sales of USD 1.1 billion in the last week in an attempt to contain exchange pressure.

“The old politics seek to generate uncertainty to boycott the government program. By doing so, they punish the Argentine people: we will not allow it ,” Adorni wrote on his X account, targeting the opposition in an area where the ruling party needs to show results: the stability of the dollar and the reinforcement of reserves in the middle of the campaign.

"For this reason, and with the goal of generating a greater supply of dollars during this period, there will be zero withholdings on all grains until October 31. End," he said.

The Casa Rosada's plan is for the agricultural sector to liquidate accumulated stocks and accelerate external sales, which would allow for strengthening reserves in the short term.

The decision follows a series of previous tax changes: in July, Decree 526 established tax rate reductions for various grains and meats.

The previous scheme had already reduced tariffs on soybeans (from 33% to 26% for grains and from 31% to 24.5% for by-products), corn and sorghum (from 12% to 9.5%), and sunflowers (from 7% to 5.5% for grains and 4% for by-products). Meanwhile, wheat and barley had been reduced to 9.5%.

The decree, signed by President Javier Milei, Economy Minister Luis Caputo, and Chief of Staff Guillermo Francos, highlighted that agro-industrial exports had grown 56% in volume and 26% in value so far in 2024, with specific increases in wheat (29%), sunflower (26%), and corn and soybean oil (4%).

Soybean dollar: The government confirmed that 25% of exported foreign currency will be freely available (Illustrative image / Web)

Monday's measure took Nicolás Pino , president of the Argentine Rural Society (SRA), by surprise. He learned of the announcement during a radio interview with Mitre .

"I just heard about it from you. Surely the grain producers have something to do with this measure. There are no exact figures, but the newspapers were reporting 10 million tons of soybeans. The real impact would have to be analyzed," he said.

From the grain industry, CIARA-CEC president Gustavo Idígoras supported the official statement: "We support any measure that involves eliminating withholdings, even if they are temporary. The details of the operation and when it will be implemented remain to be seen."