South America Calling

Paraguay's Congress has approved a 10% tax on exports of grain, wheat, corn and sunflower seeds.

The tax is designed to ease the country's fiscal woes and promote grain processing at home. The government hopes to raise $300 million a year from the tax.

Producers oppose the plan, claiming it will hurt competitiveness.

Soybean farming in Paraguay has been growing quickly over recent years amid heavy investments from Brazilians along the border.

Major soybean trading and processing firms, including ADM, Bunge, Cargill, Louis Dreyfus Commodities and Noble have operations in Paraguay.

It is expected to produce over 9 million metric tons of soybeans in the coming season and is already the world's No. 4 soybean exporter, according to government estimates. Overall grains production is pegged at around 15 mmt.

Since Paraguay is land locked, the country's grains go through Argentine and Brazilian ports.

(AG)

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