The Argentina government’s decision to gradually reduce export taxes on soybean and soy byproducts from January 2027 through December 2028 is likely to improve competitiveness of soybean oil exports from Buenos Aires benefiting major consumers such as India.

In its latest report, the US Department of Agriculture (USDA) said Argentine President Javier Milei announced a gradual reduction of soybean export taxes, which will begin in January 2027 at a monthly rate of either 0.25 per cent or 0.50 per cent, contingent on the economic situation.

The cuts were made official after publication in the Official Bulletin on June 3, 2026, following an announcement by Milei on May 21.

According to the USDA report, export tax on soybean will be reduced to 21 per cent in January 2027 from the June level of 24 per cent. Argentina aims to reduce it to 15 per cent by December 2028 through monthly gradual reductions.

To cut more

The export tax on soy byproducts will be reduced from 22.5 per cent in June 2026 to 19.5 per cent in December 2027. Argentina aims to reduce export tax for soy byproducts to 14 per cent by December 2028.

The USDA report said that these new conditions will improve Argentine farmers’ returns by directly increasing their income.

Sudhakar Desai, President of the Indian Vegetable oil Producers’ Association (IVPA), told businessline that these reductions are part of Argentina’s programme to support soybean cultivation in the country and encourage expansion of the soybean crop.

Stating that India primarily imports soybean oil from Argentina, he said soybean oil will hopefully become more competitive, if the crop becomes larger. This would be beneficial for India as one of the largest destinations for soybean oil imports. This could also help keep global palm oil prices under check. Otherwise, Argentina’s soybean crop has remained within a narrow range of about 50-54 million tonne per annum over the years, barring extraordinary years when production was significantly lower.

On Argentina’s decision to reduce export taxes on soybean and soy byproducts, BV Mehta, Executive Director of the Solvent Extractors’ Association of India (SEA), said Argentina will be more competitive to supply soybean oil to India compared to other origins.

India imports around 2.5 million tonne of soybean oil from Argentina, and small quantities from Brazil and the US, Mehta said.

Domestic impact

Asked about the impact of Argentine export tax reduction on Indian soybean processors and farmers, Desai did not see much impact, as global prices are a function of the supply and demand of various oils such as palm, canola and sunflower oil, and are increasingly becoming aligned with fuel oil prices due to global biofuel mandates.

In any case, India does not import soybeans. If soybean oil prices become more competitive, Indian refineries can partially shift from other edible oils to soybean oil, depending on future price spreads, he said.

To a query on the Argentina export tax reduction impact on soybean meal exports from India, Mehta said it will be insignificant as the world produces around 422 million tonne (mt) of soybean. Of this, the share of India is around 10 mt.

Stating that the export tax reduction increases farm-level realisations in Argentina, Desai said: “I do not think there will be much impact on India’s exports.”

He suggested that India consider providing additional incentives for soybean meal exports, while the main challenge remains improving soybean yields in the country. The soybean crop is also important from the perspective of India’s aquaculture and poultry industries, as soybean meal and de-oiled cakes are major sources of protein for these sectors.

Meanwhile, Mehta stressed the need to keep a close watch on domestic soybean crop prospects as the El Nino phenomenon is likely to play a major role in determining the kharif crops.

Published on June 12, 2026