March 17, 2010

Argentina limits beef exports amid inflation 

 

Argentina's government has extended limits on beef exports in a move to hold down domestic meat prices and dampen soaring inflation.

Argentina is a major world beef exporter and Argentines are also big consumers of the meat, so higher prices on the local market can push up overall inflation.

"The government has stopped most kinds of meat exports, except heat-processed products and high quality cuts for the European market. The idea is to keep domestic prices down," said a source at a meat packer, who asked not to be named.

Government officials already had tightened restrictions on beef exports in February, by stalling the administrative process for acquiring export permits, although there was never an official announcement.

Argentine inflation leaped to its highest level in four years in February, driven largely by higher prices for food. President Cristina Fernandez's main inflation-fighting tools have been price restrictions imposed on producers and retailers.

Government export curbs on beef, wheat and corn have angered the farm sector, which has frequently protested Fernandez's agriculture policies. Farmers have turned away from ranching and planted soy due to policies that have made raising cattle unprofitable, according to industry leaders.

At the end of February, annual inflation stood at 9.1%, according to official data. However, government price figures have almost no credibility and most private estimates put inflation at double that rate.

Last year, the government authorised 1.3 million tonnes of beef exports.