Governor of Para State in Brazil Reverses Course on Export Tax

The governor of the state of Para in northern Brazil has reversed course and now wants to cancel an export tax on grains that was set to take effect in March. Governor Helder Barbalho announced on Tuesday, February 25, that he will propose legislation to revoke the export tax that was approved in December.

The rationality given to revoke the proposed export tax was to reduce costs for producers and consumers amid the current economic scenario. The decision came after intense discussions between the agribusiness community and the government. Even though the revenue from the tax was slated for investments for the improvement of logistic infrastructure, the president of Soybean & Corn Producers Association of Para (Aprosoja/PA) warned about challenges facing the sector amid drought and low prices.

After negotiations in December, the proposed tax of R$ 4.32 per sack of soybeans (approximately $0.33 per bushel) was reduced to R$ 1.00 per sack (approximately $0.08 per bushel). For corn, the proposed tax of R$ 2.09 per sack (approximately $0.16 per bushel) was reduced to R$ 0.50 per sack (approximately $0.04 per bushel). The tax was set to take effect on March 26, 2025.

Revenue from the new tax was to be allocated to the Economic Development Fund (FDE) to finance infrastructure projects such as improved roads and bridges.

In 2024, agribusiness accounted for 65% of Para’s exports with soybeans accounting for 42%, meats 21%, and live cattle 13%. The main destination was China accounting for 35% of Para’s total exports.

Tags: corn, Brazil, prices, soybeans, Grains, investment, export tax