Argentine President Touts Tax Hikes To Curb Food Inflation, Lacks Congress Support

Argentine President Alberto Fernandez said on Friday that higher food export tariffs would help curb rising food prices, but admitted that he lacked support in Congress to push through legislation to raise levies in the major grains producer.

The South American country, the top global exporter of processed soy and the No. 2 for corn, is battling raging inflation heading towards 60%, which has forced the government to seek ways to bolster domestic supply and rein in prices.

"We have to do something to decouple domestic prices from international prices. The way to do this is tariffs," Fernandez told local station Radio Con Vos, adding though that if he sent such a bill to Congress now it would get rejected.

"These levies are a legislative issue and I need Congress to understand the problem and support a decision of this nature, if necessary," he added, citing the impact of Russia's invasion of Ukraine, which has caused food and fuel supply bottlenecks.

The government in March hiked export taxes on soy oil and soymeal from 31% to 33% and created a wheat stabilization fund to tamp down local prices of flour. Hiking tariffs on soybeans, corn and wheat, however, would need approval in Congress.

Argentina currently taxes shipments of wheat and corn at 12% and soybeans at 33%. Grains are the country's major export and top source of foreign currency, which is sorely needed to replenish depleted reserves after years of debt crises.