Argentina Decreto 38/2025 — Temporary reduction of grain and oilseed export duties (retenciones)

Mechanism

Argentina's retenciones (export withholding taxes) are a structural feature of the country's agricultural trade policy, dating to 2002 emergency legislation. They function simultaneously as a fiscal instrument (historically contributing 5–10% of federal tax revenues), a food-price stabilisation tool (taxing exports keeps domestic commodity prices below global parity), and an FX management lever (exporters must convert proceeds at the official exchange rate).

Decreto 38/2025 reduces these rates across the board:

A key enforcement mechanism: exporters must liquidate at least 95% of foreign exchange proceeds within 15 business days of filing export declarations to access the reduced rates. This condition ties the duty reduction directly to FX inflows — the government's primary macroeconomic constraint under the Milei stabilisation program.

Policy context

The decree sits within the Milei administration's broader deregulation and fiscal-consolidation agenda. Argentina holds approximately 50–55% of global soybean meal and oil export market share; incremental changes to its retenciones rate materially affect global agricultural price dynamics. The 7-percentage-point soy cut (33→26%) was calibrated to motivate additional liquidation from the approximately 20–25 million tonnes of soybeans that Argentine farmers had been holding back from export in anticipation of a rate reduction — so-called "campo retenciones strike."

The permanent zero-rate for regional-economy products (sugar, cotton, rice) targets interior provinces where agricultural export duty relief had been a longstanding political demand, and removes a structural disadvantage these commodities faced vs. imported substitutes in third markets.

Downstream implications

• Global oilseed markets: A 7pp soy duty cut on an exporter with 50%+ global meal/oil share

shifts relative competitiveness vs. Brazil and US origination; likely to pressure Chicago Board of Trade soybean futures in the short term as Argentine export volumes accelerate.

• FX inflows: The primary policy goal — accelerating the ~20–25 Mt farmer-held stockpile

into the export pipeline and generating USD liquidity within the official exchange-rate band.

• Argentine grain crushers and traders: ADM, Bunge, Cargill, and domestic processors

(Aceitera General Deheza, Vicentin) benefit from improved crush margins and higher throughput volumes at the country's major port-complex at Rosario–San Lorenzo.

• Fiscal impact: The lower rates reduce retenciones revenue at a time of fiscal consolidation;

the government bet is that higher export volumes more than compensate for the lower unit rate.

Subsequent extensions

The June 30, 2025 sunset was not a clean expiry. Subsequent executive decrees extended the reduced-rate regime for wheat and barley through at least March 31, 2026 (Decreto 439/2025), and further refined rates for corn and sorghum. These should be tracked as amendments once primary source URLs are confirmed.

Open questions

• Whether the 95% FX-liquidation-in-15-days condition has been enforced or routinely waived
• Whether the permanent zero-rate for regional-economy products survives future administrations
• Rate trajectory for soybeans post-June 2025 — Milei publicly stated a goal of eliminating

retenciones entirely, but fiscal constraints may delay this beyond the mandate

• Impact on domestic food inflation (lower export prices increase domestic supply, but soy is

not a direct staple; wheat and maize pass-through to flour and feed costs is more direct)