The rising prices – in the last week around 40% – for grains have already begun to have an impact on the domestic market for cereals and products that have flour as one of their main raw material components. The rejection of the sector has been expressed on several occasions but there is a crucial point: as stated in the annex to the resolution, the price of wheat in the trust will be $23,000 per ton. At the blue dollar they are US$114, against the almost US$500 in which Chicago closed and the $34,180 that were paid in Rosario.
According to the Resolution, it was established that “individuals or legal entities that operate in the Grain Wheat, Grain Corn, Wheat Flour and Noodles Market that are registered in the Single Registry of the Agrifood Chain (RUCA), either as producers, fractionators, stockpilers, millers, exporters, elevators and porters or other areas of commerce, form a Trust whose rules and scope will be determined in the respective contract that must be signed for this purpose within a period of 30 business days.
This instrument “must watch over the general economic interest of the population, through an Internal System of Financial Assistance that, preserving market freedom and free competition, guarantees internal supply and ensures fair and reasonable prices for consumers.”
Beneficiaries of the same will be “all those Suppliers of Products Subject to Compensation that are in the Care Price Program that adhere to the Trust subject to compliance with the requirements to be such.”
The Secretary of Internal Trade maintained during the week, when the constitution of this trust was announced, that “This tool allows for certainty and eliminates volatility, two of the main requirements of the industry to guarantee the supply and price of basic foods such as dry noodles and flour.”
“This mechanism responds to the need to decouple prices to protect the domestic market in a global context of war between Russia and Ukraine and with the international price of wheat high and sustained,” he concluded.
Main criticisms
The Rosario Stock Exchange considered that the promotion of a trust “generates interference in the normal functioning of institutionalized grain markets, affecting the formation of reference prices.” It was also stated that this initiative “goes in the opposite direction to the need to have clear, predictable and long-term rules that encourage investment.” To which the Buenos Aires Cereal Exchange added: “such measures are considered a negative stimulus for the production chain. It would be more efficient to implement alternatives to subsidize demand and not supply”, and they maintained that “the implementation of measures of similar characteristics in the recent history of our country were not effective in containing the prices of the products of the basic basket that they persecuted as target”.
Finally, the leadership of the field that integrates the Liaison Table indicated weeks ago that the incidence of said mechanism in the consumer price of wheat will be minimal. “This policy attempt would not solve the problem, since what affects price increases is the rise in the values of the other components of the same, such as logistics, distribution, processing, and marketing, due to the effect of inflation itself. And also, and very important, is the tax component. We believe that this trust proposal would be a covert retention and another fiscal bite to the producer”, commented the presidents of the four entities of the field.
Source: Ambito
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