Bunge Brasil, a subsidiary of U.S. based Bunge Ltd, said it is closing a soy processing plant in southern Rio Grande do Sul state this week, saying Brazil’s tax structure favors the export of raw soybeans. According to Reuters, Brazil’s soy crushing plants processed less in 2013 than in the previous year after President Dilma Rousseff’s government lifted the so-called PIS/Cofins social-security and payroll tax from the cooking-oil industry, leaving crushers holding large amounts of worthless tax credits.
Soyoil producers had previously been able to use those credits against other tax liabilities, but many of those taxes were also lifted. The changes have hurt the crushing industry’s profit margins and resulted in idle processing plants.
Bunge still has six soy processing plants in Brazil, in five different states.