Argentina raises biodiesel export tax to 15 percent

May 28 (Reuters) – Argentina’s government is raising an export tax on biodiesel to 15 percent from 8 percent, effective July 1, according to a decree published in the official Gazette on Monday.

Argentina is one of the world’s top providers of biodiesel fuel, exporting 1.65 million tonnes in 2017, but it has been hit by retaliatory tariffs in recent years.

The U.S. International Trade Commision has added anti-dumping duties of 60.44 percent to 276.65 percent to already steep anti-subsidy duties on imported biodiesel from Argentina and Indonesia.

The CIARA-CEC exporters’ chamber told Reuters earlier this month it also expected the European Union to stop importing biodiesel by imposing new tariffs in September or October.

The decree, signed by president Mauricio Macri, is meant to “continue fostering convergence” between biodiesel export taxes and soy oil export taxes.

The country is the world’s top supplier of soyoil used for cooking and making biodiesel. Local biofuels industry group Carbio declined comment on the new taxes.

When Macri won office on a business-friendly platform in 2015, the soybean export tax stood at 35 percent. The tax started the year at 30 percent and is being cut by a half percentage point every month for two years. It currently stands at 27.5 percent while the tax on soy oil and soymeal exports stands at 25.5 percent.

Macri outright eliminated export taxes on corn and wheat soon after his inauguration in December 2015 – a boon for farmers but not for Argentina’s fiscal accounts.

Tighter fiscal policies were imposed by Macri earlier this month when the peso currency took the brunt of a global flight from emerging market assets, weakening 16.5 percent so far in May to 24.6 per U.S. dollar.

The drop forced Macri to ask the International Monetary Fund for a standby loan agreement that could offer affordable financing if the government runs out of cash.

Treasury Minister Nicolas Dujovne said last week the government may stop gradually lowering soybean export taxes as it tries to lower the deficit.

Dujovne’s team cut Argentina’s 2018 fiscal deficit target this month to 2.7 percent of gross domestic product from 3.2 percent. (Reporting by Caroline Stauffer and Maximilian Heath Editing by Nick Zieminski and James Dalgleish)