The Ministry of Economy, which heads Sergio Massaannounced a set of measures after the inflation data for April was released, which escalated to 8.4%in its fifth consecutive monthly rise. For the first time since 2002, the food category ended in double digits (10.1%)Therefore, four measures seek to contain these prices, to try an income policy until the measure that would have the greatest impact can be carried out, which is to strengthen the reserves of the Central Bank, through the IMF, China, Brazil or the BRICS.
So, Economy will advance with four measures: allow the Central Market to import food to sell in local shops; suspend antidumping duties in branches of widespread inputs and expedite SIRA approvals for capital goods. The ultimate goal is to expand the offer to contain food, which only in the first four months of the year they climbed 41.2%, almost 10 points above the general level.
In any case, the main doubt of the market and of the food companies that skyrocketed after the announcements is how they are going to comply with the measures, which will imply greater foreign currency requirements, in a context of scarce reserves and historical drought. “Dollars will be”assured sources from the Ministry of Domestic and Foreign Trade, of Matias Tombolini. What is not clear is how this circuit will be given.
As the Government will guarantee official dollars for the food sector that complies with the price agreements, it is that they decided to create a “Unit for Monitoring, Traceability and Promotion of Trade Operations”. According to official sources, the objective it will have is to monitor imports and their subsequent sale price, so that it follows the variation of the official dollar, and not to highlight the parallel or financial exchange rate.
This unit will be made up of the secretariats of Commerce, Production and Agriculture of the Ministry of Economy, as well as the AFIP, DGI, Social Security and Customs, as well as the Central Bank, the Insurance Superintendence, the National Securities Commission and the FIU. . Although one of its objectives will be to “promote commercial operations with equity, avoiding dominant positionsIn principle, there will be no member of the Defense of Competition.
Measures
The Central Market may be a direct importer of food. They will enable it in the import registry to be able to buy a food basket abroad, such as fresh products (fruits, vegetables, meats) and non-perishable dry products (essentials).
The objective will be to sell these goods in local businesses, where price agreements and controls do not reach, such as Fair Prices. Private sector sources say that the difference in prices with supermarkets exceeds 40%. This measure was taken for the “abuse of companies with a dominant market position”, according to information released by Economy. In her last speech, Vice President Cristina Kirchner had referred to this issue: “20 companies handle 74% of the billing of what you buy in the gondola; the market would not be fragmented”he affirmed, and showed a plaque with the names of each of the firms.
In the same line of the diagnosis of “economic concentration” and its impact on prices, Economy announced that it will suspend antidumping duties in branches of widespread inputs, with the objective, as they assured, of “promoting competition in highly concentrated branches and reducing prices along the value chain.
New Fair Prices
The rise in inputs was one of the claims of the food companies that were part of Fair Prices and they had increases capped at 3.2% per month, with cost increases closer to inflation, which was almost triple. The products that were included have applications in the food chain, such as PET in the manufacture of plastics, sodium benzoate for preservatives, zinc oxide for additives or fungicides, for citrus farming. However, it will also be applied to inputs from other industrial chains, such as TDI, which is used to manufacture mattress foams. In the list, there is no good related to clothing and footwear, the item that climbed the most during the management of Alberto Fernández.
The CIFRA-CTA study center, widely consulted by Kirchnerism, assured in one of its latest reports on the economic situation that during the entire government administration, “the prices of the concentrated branches rose almost 10% above consumer prices”at the same time that there is a “real wage stagnation”, for which “a new structure of relative prices is configured in favor of the most concentrated sector of capital”.
It is that, despite the fact that the REM of the Central Bank does not foresee that inflation will pierce 7% per month during the coming months, Commerce has already agreed to a new price agreement with food companies for “90 days”, to reach the primary elections in August. They will have enabled the 3.2% that was already planned, and an extra 1.8% will be added, after the 20th of each month, which will give a limit of 5% monthly increase.
Source: Ambito
