Americas News
Dry Bulk Gets Boost from Argentina Export Tax Change
Argentina's new government has introduced tax changes that could cause a rise in demand for dry bulk shipping of agricultural products out of the country, and perhaps a rise in global demand within the sector, reports IHS FairPlay.
Earlier this month, new Argentine president Mauricio Macri eliminated export taxes on wheat and corn, and reduced rates for export of soybeans and soybean meal.
It was said that this should spur demand for Panamaxes, Supramaxes, and Handymaxes sailing from Rosario, Argentina with agribulk exports.
Such shipments to key markets like China and Japan would have to sail up to 34 percent farther than for similar commodities shipped from competing export regions like the U.S. Gulf Coast, thus increasing the overall demand for shipping.
These effects were seen having a near-immediate impact, with Argentine farmers estimated to be holding high storage levels of products like soybeans, which analysts said could be soon sent for export.
Export projections from the USDA for wheat from Argentina have been increased by 20 percent for the 2015-16 marketing season, as a result of the export tax changes.
The news is an unfortunately rare positive for Dry Bulk, which is otherwise in the midst of what one player has called the worst crises of the last 25 years.
Earlier this week Ship & Bunker reported that the sector was facing a grim 2016, which is expected to be punctuated by bankruptcies.
