The Argentine government announced that it will reactivate beef exports by facilitating their shipment abroad, but at the same time, it will maintain a series of restrictions to avoid excessive price increases for its products.
The rehabilitation of exports was announced by the ministers of Productive Development, Matías Kulfas, and Agriculture, Luis Basterra, together with the Argentinean president, Alberto Fernández, as a result of a meeting with representatives of the livestock sector and export companies.
The initial ban was introduced last May as a measure to try to control the high levels of inflation that Argentina reached at that time. The government justified the measure on the grounds that it sought to curb the "disproportionate and unjustified" rise in the price of meat on the local market. The measures excluded 20% of shipments corresponding to operations linked to exports such as the Hilton quota to the European Union.
After a month of limitations on beef exports, the government has finally reached an agreement with Brazilian companies such as JBS SA and Marfrig Global Foods SA, which are dedicated to packing meat products, allowing them to work up to half of the 2020 levels. Matias Kulfas told reporters that "we are prioritising the income of Argentines".
His measures also include increasing internal price controls and reviewing long-term measures for beef policies.
The new presidential decree will reopen Argentine exports, but will maintain certain restrictions that all companies involved must comply with: it establishes the obligation not to make shipments that exceed 50% of the annual average until 31 August. A number of products remain banned until December. In the words of Minister Kulfas: "All the barbecue cuts remain for domestic consumption".
The government plans to maintain these restrictions in order to achieve greater domestic supply, and to avoid price increases in meat products which, according to official data, increased by 72.9% year-on-year, well above the general price variation of 48.8%.
Argentina stands out worldwide for being one of the main meat consumers, as well as, the fifth largest producer and the fourth largest exporter, sending up to 30% of its production to other countries, says the EFE agency. In 2020, exports reached 2,719.4 million dollars, promoted mainly by the great demand from China, which accounts for three out of every four tonnes of exports made by the Argentinean country.
According to Bloomberg, the Argentine government's measures have not achieved their goal of reducing high meat prices, but have instead led to discontent and demonstrations by cattle farmers, which has led to a further increase in prices.
The main people affected by the government's decision were cattle farmers, who blamed fiscal deficits and loose monetary policy for the rise in the price of their products.
According to data from the Instituto de la Promoción de Carne Vacuna Argentina, the country has increased its prices by 76% over the previous year. This puts inflation at 49%, in a country where poverty is increasing due to rising prices and the COVID-19 situation.
Latin America Coordinator: José Antonio Sierra.