MercoPress. South Atlantic News Agency

Kirchner conditions lifting ban on beef exports

Restrictions on Argentine beef exports will become more flexible once supply of the domestic market is ensured at accessible prices, promised Friday Argentina's cabinet chief Alberto Fernandez.

Earlier this week the meat industry and cattle farmers reached an agreement with the Argentine government to "abundantly" supply the domestic market with cheaper beef cuts, thus helping to contain soaring prices at consumer level.

Last March President Nestor Kirchner banned beef exports and live cattle overseas sales for six months in an attempt to bring down prices of beef at consumer level which given their impact in the beef eating Argentine food basket were fueling inflation.

Exports will resume once "the domestic market has a fluid and guaranteed supply of 180.000 tons of beef per month plus reasonable prices, which we estimate correspond to those prevailing at consumer level last November" pointed out Mr. Fernandez.

"Only then will we sit again and begin discussions on lifting beef export restrictions".

Mr. Fernandez said that an immediate drop in beef prices to the consumer should be in the range of 20%, "which I expect will become evident in the coming days".

The president of the Butchers Owners Association from the City of Buenos Aires Alberto Williams and cattle auctioneer Fernando Saenz Valiente anticipated lower prices will begin to appear in "a week's time", but it will take over two weeks for the market to stabilize according to the new rules.

Susana Andrada head of one of the several consumers associations said that "we expect real political willingness and responsibility from each of the sectors involved in the signed agreement so this effectively reflects in prices".

The signed agreement involving cattle farmers, auctioneers, abattoirs, distributors and butchers was reached Thursday evening after long discussions with Argentine Economy Minister Felisa Miceli. President Kirchner joined at the final stages of the negotiation.

The agreement covers eleven different "popular" cuts ranging in price from the equivalent of 0.80 US cents to three US dollars per kilo, which means butchers will be receiving carcasses at an average 1.50 US dollar per kilo and live cattle auctioned in the range of 80 US cents per kilo.

According to the agreement signed once "beef supply in the domestic market has normalized and consequently prices, exports with restrictions, will resume". Overseas sales will be mainly of the most expensive cuts and initially equivalent to "50% of volume exported in the second quarter of 2005", but can be modified conditioned to the evolution of supply.

"Current difficulties have forced all of us in the industry to surrender profitability for the sake of Argentina's cattle industry and its quick return to international markets", admitted Jose Miguens president of the all powerful Argentine Rural Society.