June 7, 2023

Lakeview Gazette

Complete News World

How much is paid for meat in Argentina and neighboring countries?

An individual diagnostic compares the value of key cuts and anticipates what will happen to prices in the domestic market.

Are Argentine consumers paying higher or lower prices for beef compared to prices paid in other countries in the region? The Institute for Studies on Argentina and the Latin American Reality (Ieral) of the Mediterranean Foundation raises this question based on the acceleration of inflation in which the value of the main cuts consumed in the country is being revalued. In addition, interventions in foreign trade (export rights, non-exportable cuts, etc.) are taken into account, with the aim of controlling internal meat prices. Also, due to recent announcements by the country’s Economy Minister Sergio Massa, duty-free imports of food will be required to control domestic prices.

What is the weight of taxes on milk, bread and meat?

Ieral describes comparisons of neighboring countries to establish an estimated price for the end consumer.

• In a comparison between Uruguay and Argentina, based on 12 meat cuts and values ​​for the month of April, the average price of this basket was US$9.40 per kilogram in Uruguay and US$8.3 per kilogram in Argentina (in both cases at the official exchange rate), that is, on average, meat in Argentina outperforms Uruguay. 12% cheaper than This gap was smaller than that observed in the last months of 2022, which was close to 30% (in favor of Argentina), but at other moments, meat in Argentina was more expensive than in Uruguay (+18% in 2015 and +8% in 2016).

See also  Economist Daniel Marks spoke about the government's actions troubling the IMF and the challenges in negotiations.

• In a comparison between Chile and Argentina, based on the price of 13 cuts of beef, the average price of this basket was US$12.40 per kg in the neighboring country and US$9.80 per kg in Argentina. For the reference month, beef is 21% cheaper in Argentina than in Chile. Here, too, the gap seen earlier this year, when it reached 39%, has always been in favor of Argentina.

• For a broader study, Brazil was included. For example, online supermarkets in Chile, Uruguay and Brazil, carried out in the third week of this month, concluded that the price of a basket of eight medium/high quality cuts was $2,687 per kilo in Argentina. $2,545 per kg in Brazil, $3,174 in Uruguay and $3,555 in Chile. These prices in online supermarkets reveal that the country continues to have cheaper beef than Uruguay and Chile, and are 5%-6% higher than Brazil. Exporter and very competitive in terms of beef and beef prices globally (low costs). Although these are consumer prices, the value gap with Brazil is so small that importing cuts from that origin would have little, if any, effect given the logistical costs of bringing this commodity into the country. , at the internal price of the good, raises the work done by economists.

The measurement was carried out in 16 supermarkets and over 150 cuts of beef prices from four countries. Adjusted for inflation, supermarket prices in May were lower than those seen in the past two years, a trend seen in both Argentina and Brazil, particularly in the latter. “One factor that reveals low prices in a neighboring country is exports abroad,” analysts note. In the first quarter, Brazilian beef exports fell 30% in value, with a 16% adjustment in volume and a similar percentage in average export price. As can be inferred, the higher flow of meat to the domestic market and the lower opportunity cost associated with lower international prices will have higher domestic prices in the Brazilian market. For Argentina, prices at the consumer level in April were 80% higher than the same month in 2022, a nominal variation that seems too high, but represents a real adjustment based on local inflation (109% for the same period). 15% norms, that is, a significant reduction in the product price, highlights the individual diagnosis. There are external and internal factors that affect this loss of value. Regarding the external environment, the same situation is happening in Brazil, with the fall in international beef prices compared to last year, the average price per ton exported this year is 27% lower than the observed price. In the first quarter of 2022. In terms of local factors, on the supply side, drought and lack of sufficient feed for animals have forced many companies to accelerate, increase rejections and exports (with 50.3% women in April, 3 percentage points higher than the same month in 2022), and, on the demand side, a complex of consumption There is the macroeconomic scenario, which aggregates the fall in the purchasing power of the incomes of various social segments (salaried workers, retirees, self-employed). employed with low productivity and so on) and very low levels of confidence in the economic future. “In this scenario, which combines high meat supply and domestic demand with low international prices, it will be difficult to recover meat prices in real terms in the coming months. Good news for consumers, not so good for farm and meat producers,” explain the economists.

See also  Dollar Today Live: How much opens this Thursday, April 27 and what is the minute-by-minute price