BUENOS AIRES – Argentina, a major exporter of beef in the world with some 819,000 tonnes sent abroad last year, has suspended foreign sales for 30 days to combat price increases in the domestic market, said the government yesterday.
“As a consequence of the sustained increase of the price of beef in the domestic market, the government decided to implement a set of measures aimed at regulating the sector, restricting speculative practices and avoiding tax evasion in foreign trade. During the implementation of these measures, beef exports are limited for 30 days,” said a statement from the presidency.
Exceptions will be allowed for foreign exports already in progress.
Centre-left President Alberto Fernandez told beef industry representatives about the decision during a meeting at the presidential mansion Casa Rosada.
Last year, Argentina exported US$3.37 billion (RM13.9 billion) worth of beef and cow leather – a 16.5% drop from 2019 – primarily to China, Germany and Israel, according to state statistics agency Indec.
Agricultural exports make up a majority of foreign spending in the country.
In an interview on Sunday evening as he returned to Argentina from a trip to Europe, Fernandez said he is “worried” about the increase in prices, especially of food.
“It worries me a lot because it is inexplicable, there is really no reason, other than the increase in consumption, to explain the increases that we saw in March and April,” he told news channel C5N.
Fernandez said he “celebrates” that Argentina exports beef, but regrets that “Argentines are made to pay the prices they are made to pay for meat”.
He complained that only 8,000 tonnes of the 200,000 tonnes of beef eaten in Argentina per month are subsidised for consumers domestically – an amount he called “crumbs”.
Sustained inflation
As of 2021, Argentines consume an annual average of 49.2kg of beef per person, compared with the 2009 peak of 69.3kg on average, according to the Chamber of Meat Industry and Trade.
Beef industry groups pushed back against the government announcement.
“We are going to join together immediately to totally reject this disastrous measure,” said rancher Daniel Peregrina, president of industry body Argentina Rural Society, last night.
“The damage caused by the measure will decrease the price of meat, making prices rise as has happened in the past.”
On Twitter, the Argentina Rural Confederation rejected the government’s plan.
“The closure of meat exports is an error.
“A step back for the development and growth of ranching. We are on our way to a trading halt.”
Argentina has one of the most elevated consumer price indices in the world, with inflation hitting 4.1% last month, and a total increase of 17.6% in the first four months of the year, said Indec.
Such sustained incremental inflation reinforces the concern that it will be difficult for the government to cap this year’s total inflation at 29%, the target laid out in Budget legislation.
The cost of living has increased 46.3% in the last 12 months, according to Indec.
In an effort to fight the effects of a long Covid-19 lockdown, the government launched an economic aid programme that includes large monetary payouts.
Argentina is navigating its third year of recession, worsened by the pandemic, which led to a 9.9% drop in gross domestic product last year. – AFP, May 18, 2021
