August 26, 2014

Argentina restricts beef exports to control price inflation

Argentina will restrict beef exports for a 15-day period, as part of an effort to control rising prices in the domestic market.

The decision, which was confirmed by cabinet chief, Jorge Capitanich, has led to criticism by business leaders, with some, including Miguel Schiariti, the Head of the CICCRA Argentine beef trade chamber, saying the strategy will have "no positive effects."

"This is no way to fix the situation; it is rather the repeat of the policies that led us to lose 10 million of cattle heads, to having 135 abattoirs closed and losing 16,000 jobs," Schiariti said. The chairman believes that the rise in cattle prices follows a restriction in supply due to roads in "bad conditions."

In the meantime, Capitanich blamed rising prices on "speculation fuelled constantly by media, economists and opposition representatives which have devaluation perspectives and a destabilising interest that led to the retention in the cattle market."

He added there is also "speculation resulting from the increase of exports with the EU toll and trade perspectives with the Russian Federation."

According to the Argentinean government, beef prices have climbed 54% since the beginning of 2014, a hike that "has no relation (to) costs' structure." In fact, for the past two weeks, cattle prices have jumped 10-15%.

In accordance with the plan, the Domestic Trade office will reduce permits for beef shipments.