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Montevideo, April 23rd 2024 - 02:21 UTC

 

 

Argentina to import food to curb price hikes

Monday, May 15th 2023 - 10:38 UTC
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Food accounted for much of the inflation the Argentine government is unable to control Food accounted for much of the inflation the Argentine government is unable to control

Argentine authorities Sunday announced a set of measures to tackle inflation, which include more active involvement in the foreign exchange market. But the most striking of them all was the opening of food imports at zero tariffs to hit local producers who over-benefitted from protectionism.

 Effective Monday, fresh food (fruits, vegetables, vegetables, and meats) and non-perishable dry staple products can be imported at zero tariffs through the Central Market.

“In view of the detection of distortions in food prices by the Secretariat of Commerce, due to the abuse of companies with a dominant market position, the Central Market will be able to directly import such products with zero tariffs, creating a greater supply of products without intermediation costs,” the Economy Ministry said in a statement.

Products will be offered directly to the public and to local retail stores. In view of the refusal of wholesalers and large supermarket chains, smaller stores (a large percentage of which are owned by Chinese entrepreneurs) could be supplied with a basket of products defined by the Secretariat of Commerce, imported by the Central Market, it was explained, to “break with the price abuse carried out by these companies when supplying these local stores.”

The Government also decided that the Central Market could generate public/private trusts for the purchase of food products. Thus, each local store could be a shareholder, contributing funds for the centralized purchase “generating better purchase prices and eliminating the intermediation in the sale of such products and the abuses of distributors and large companies.”

The administration of President Alberto Fernández will also create the Unit for the Follow-up, Traceability, and Promotion of Trade Operations, which will be made up of one member from each of these different agencies: the Secretariat of Commerce, the Secretariat of Production, the Secretariat of Agriculture, the Federal Administration of Public Revenues (AFIP), the General Tax Directorate (DGI), Customs, the Central Bank, the Superintendence of Insurance, the National Securities Commission (CNV) and the Financial Information Unit (UIF).

In this context, a survey by the Argentine Confederation of Medium-Sized Companies (CAME) indicated that in April consumers paid, on average, 3.9 times more than what agricultural producers charged for their products. The Origin and Destination Price Index (IPOD) indicated that consumers paid $3.9 (gondola/destination) for every $1 received by producers for the agri-food products that make up the basket.

Categories: Economy, Argentina.
Tags: Inflation.

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