Brazilian soybean producers in talks to reduce and delay local export taxes

Brazilian soybean producers of Pará and Maranhão states are negotiating with local governments to lower and postpone the export taxes imposed by both local administrations, which could cause farmers to lose approximately 12% of their income, sources said.

The tax bill "was promulgated on Feb. 25 and will come into effect on March 20. The tax will be paid one month after you 'move' the product. The agricultural sector is expected to appeal this decision, stating that it is unconstitutional," José Carlos Oliveira, president of Maranhão's division from the national soybeans association Aprosoja, told Platts, part of S&P Global Commodity Insights.

Maranhao's local government, led by Carlos Brandão, introduced bill 12.418 in November 2024. This bill imposes a 1.8% export tax on each invoice, especially for goods loaded at Itaqui port -- one of the largest public ports in the country, located in Maranhão state -- starting on March 20. The local assembly passed the bill at the end of 2024.

"Farmers will have to pay this tax until they have a final legal decision on this matter," Oliveira said. "A tax of 1.8% would compromise around 12% of the net revenue from a sale of soybeans, in a time where farmers are already struggling to generate revenues. The same goes for corn, where plantings haven't yet started."

For its part, Pará's local assembly passed law 10837/24 at the end of 2024, imposing an export tax of Real 4.32 per bag (2.20 bushel) of soybeans and Real 2.09 per bag of corn, starting March 26. Producers and officials have been in talks to lower the export tax, with a proposal of Real 1.00 per bag of soybeans and 50 Brazilian cents per bag of corn being discussed.

"The governor will analyze this. Although it is a significant reduction, it is still a [harsh] reality for a state that has only been in the activity [soybeans production] for a few years. We don't have consolidated productivity yet like other taxed states do," said Vanderlei Ataides, president of Aprosoja Pará, said.

Ataides added that producers are also trying to delay this law to 2026 instead.

"The law is meant to start taxation in March, but we are negotiating to move it to next year," he said, "the state hasn't issued an opinion yet. We await the decision."

According to the latest data from the Brazilian agriculture agency Conab, Pará and Maranhão states are expected to produce 3.9 million mt and 4.7 million mt of soybeans during the 2024-25 harvest season. The numbers are low compared to Mato Grosso's 47.1 million mt or Paraná's 21.8 million mt expected. Nonetheless, Pará and Maranhão rank in the top three producing states in the North and Northeastern regions of Brazil.

The tax could potentially benefit US soybean producers, as it could raise the prices of Brazilian soybeans.

"This could help US producers in the short term because it may give Brazil producers a higher cost of production compared to exporting," said Brady Holst, market development committee chair and at-large director of the Illinois Soybean Association.

Platts last assessed SOYBEX FOB New Orleans soybean price for April shipment at $416.31/mt Feb. 20, up $6.53 from Feb. 19.

Platts last assessed the SOYBEX FOB Santos soybean price for April loading at $398.69/mt Feb. 20, up $6.16 from Feb. 19.