April 10, 2006

Argentina holding down beef prices

Argentina's economy minister said the government had reached an agreement with producers to freeze domestic beef prices on 11 popular meat cuts to keep domestic prices low for the rest of the year.

Economy Minister Felisa Miceli said the agreement could prompt authorities to reconsider ways to ease a 180-day export ban on Argentine beef.

Beef prices have risen as much as 9 percent in March, and inflation in the month alone has crept to 1.2 percent. The government is trying to hold down beef prices as a measure to fight inflation. The country has also self-imposed a beef export ban to curb rising prices at home.

The agreement, which would affect rural cattle ranchers and meatpackers, includes a pledge from the beef industry to sell at least 180,00 tonnes of livestock each month for domestic consumption. In turn, the government said restrictions on select beef exports might be lifted in the second quarter.

Argentina has the highest beef consumption in the world at more than 60 kilogrammes a year. Argentina is the world's fifth-largest producing nation and was a key supplier to Russia and the EU.