USSEC and NOPA Discuss Argentine Differential Export Taxes with SE Asian Oilseed Processing Industry
- General News
USSEC representatives, together with the North American Oilseed Processing Association (NOPA), met with officials from the Thai and Malaysian oilseed processing industry to discuss the negative impact of Argentine differential export taxes (DETs) on the Southeast Asian region’s crush industry. Virginia-based USSEC consultant John Baize, President of John C. Baize & Associates; Tom Hammer, President of NOPA; Dr. Neoh Soon Bin, Managing Director of Soon Soon Oil Mills (Malaysia); Khun Petch Wanglee, Assistant Managing Director of Thanakorn Vegetable Oils (Thailand); Khun Supachai Vitayatanagorn, Foreign Trade Manager of Thai Vegetable Oil (Thailand) and U.S. Foreign Agricultural Service staff (FAS) attended the meeting.
DETs are a system of export taxes in Argentina that essentially subsidize the Argentine oilseed processing industry by providing them with a differential advantage when the soybean meal they produce is exported. It is estimated that in 2011, the export tax increased Argentine crush margins by $11.90 per metric ton (MT), which allowed Argentina to have a significant price advantage in the export markets. Thailand imports over one million MT of soybean meal from Argentina annually (over 40% market share of imported meal). To compete, Thai crushers must discount the meal they produce locally from imported soybeans. Thai crushers estimate a loss of more than $71M in revenue in 2011 as a result of the unfair advantage DETs have provided the Argentine exporters. A similar situation exists in Malaysia.
The purpose of the meeting was to apprise the regional crush industry of the negative impact DETs have on their business and to elicit support for U.S. efforts in addressing this issue with the World Trade Organization. U.S. exports of soybeans used for crushing in the SE Asian region will exceed one million MT in 2013.