MercoPress. South Atlantic News Agency

Argentine president avoids YPF and talks about chocolates and beef export levies

“I’m not planning to share chocolates with you”, said CFK

On the day Argentina was expected to make a major announcement referred to the oil industry and the ongoing dispute with Spain’s Repsol-YPF oil and gas corporation, president Cristina Fernandez surprised everybody by talking about chocolates, the yerba infusion and meat export taxes.

At Government House, Thursday afternoon, President Cristina Fernandez turned up with a chocolate box in her hands and praising her project of re-industrialization by restricting imports and facilitating domestic production.   

“These are chocolates that we've started producing again in Argentina,” said the president and “I'm not planning to share these chocolates with you”. The words, delivered with a broad smile, led to cheers and repeated applause from the audience which included workers from the meat packing industry.

Adding further fuel to speculation about how the government is going to take over YPF to ensure energy ‘self sufficiency’, the president announced plans to lower some beef export taxes in exchange for ensuring jobs.

“Thermo-processed meat will enjoy a ten point reduction in export levies, but in exchange meat processing plants must keep all employees”, said Cristina Fernandez.

“The levies reduction on meat from 15% to 5% will represent a transfer of 12.5 million dollars to the meat processing plants, so jobs will have to be respected and we expect a 5% increase in export volume”.

The president added that “we will conform a committee with the Economic Planning Secretariat, the Trade Secretariat, the Labour Ministry and AFIP (tax revenue agency) because we will demand that all employees keep their jobs”.

She insisted that the thermo-processed industry is the one which provides most added-value to meat products so “it is important that the effort from the government giving up revenue, is fully compensated by the entrepreneurs because we’re talking about a significant amount of money”.

The Argentine president also warned that if the yerba infusion tea, a staple of Argentina, Uruguay, Paraguay and south of Brazil disappears from supermarket shelves because of price disputes or hoarding, she will not hesitate in applying the Supply Law which enables the government to confiscate the product.

But President Cristina Fernandez distracting tactics did not impede further speculation on the future of YPF and the possible options under consideration by the Argentine government which saw the company’s shares surge 7% in Buenos Aires and the American depository shares in New York, 8.6%.

“I think the government's internal problems are very big and that may partly explain the president's silence,” said Carlos Pierro, an energy analyst and former YPF president.

Pierro also said Cristina Fernandez may not have felt comfortable detailing YPF's future just before an upcoming Summit of the America's meeting in Cartagena this weekend.

At the meeting the president will meet with other leaders from the region, including the president of Mexico, whose state-run oil company, Petroleos Mexicanos, or Pemex, has a stake in Repsol. In February, the two companies signed a 10-year strategic industrial alliance.