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, according to a report by the US Department of Agriculture (USDA).
Export Tax Reduction Timeline
President Javier Milei announced the gradual reduction of soybean export taxes on May 21, 2026, which became official after publication in the Official Bulletin on June 3, 2026. The cuts will begin in January 2027 at a monthly rate of either 0.25% or 0.50%, contingent on the economic situation. The USDA reported the following targets:
| Product | Current Rate (June 2026) | Target Rate (Dec 2028) |
|---|---|---|
| Soybean | 24% | 15% |
| Soy byproducts | 22.5% | 14% |
Additionally, the export tax on soy byproducts will be reduced to 19.5% by December 2027 on the path to the final target. According to the USDA, these new conditions will improve Argentine farmers’ returns by directly increasing their income.
Impact on India's Soybean Oil Imports
Sudhakar Desai, President of the Indian Vegetable oil Producers’ Association (IVPA), told businessline that the reductions are part of Argentina’s programme to support soybean cultivation and encourage expansion of the crop. He said soybean oil will hopefully become more competitive if the crop becomes larger, which 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. Desai noted that Argentina’s soybean crop has remained within a narrow range of about 50-54 million tonnes per annum over the years, barring extraordinary years when production was significantly lower.
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 tonnes of soybean oil from Argentina, and small quantities from Brazil and the US, Mehta added.
Domestic Market Effects in India
Asked about the impact of Argentine export tax reduction on Indian soybean processors and farmers, Desai did not see much impact. He explained that 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. Since 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.
On the impact of Argentina’s export tax reduction on soybean meal exports from India, Mehta said it will be insignificant as the world produces around 422 million tonnes (mt) of soybean, of which India’s share is around 10 mt. Desai added that the export tax reduction increases farm-level realisations in Argentina, but he does 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 for India’s aquaculture and poultry industries as soybean meal and de-oiled cakes are major sources of protein.
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.
This article was published on June 12, 2026, based on the USDA report and interviews with industry representatives.
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