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16/04/2007 | Argentine price controls spark milk, meat shortages

Bloomberg Staff

Argentina's price controls are triggering shortages of milk, meat and other foodstuffs on the shelves of the nation's supermarkets.

 

The Center for Consumers Education, a non-governmental watchdog group, was unable to conduct its weekly survey of basic food prices last week because many of the items it counts aren't available in supermarkets, said Claudio Boada, the center's vice president.

``We are seeing serious shortages in Buenos Aires and throughout the country,'' Boada said in a telephone interview in Buenos Aires. ``The price control policies seem not to be working and producers probably prefer to hold onto their goods instead of selling them at lower prices.''

Argentina's price controls were imposed by President Nestor Kirchner to contain surging inflation spurred by rising consumer demand amid a five-year economic expansion. The government last year put price controls hundreds of products while banning beef exports and limiting wheat sales abroad to force producers to sell more in local markets.

``Maximum prices of meat seems to reduce the industry's capacity to maintain its stock,'' said Omar Borla, an economist with Dresdner Kleinwort Wasserstein in New York. ``It's not news that price controls don't work. They never did,'' he said.

At the Jumbo supermarket in Palermo, one of the city's biggest food stores, hand-written placards greet shoppers in the meat section, apologizing for the lack of prime cuts. On a recent weekend, the supermarket lacked fillet steaks from some of the country's best-known brands. Shortages are due to ranchers' refusal to sell to Jumbo's parent company, Cencosud SA, at government-set prices, the signs say.

Milk Supplies

Miguel Schiariti, head of the Chamber of Meat Industry, said wholesalers are offering meat but supermarkets aren't buying it. Newspaper Clarin last week said Argentine Interior Commerce Secretary Guillermo Moreno ordered supermarkets not to buy meat at higher prices, Clarin reported.

Supply of milk and milk derivates has shrunk by as much as 30 percent as producers increasingly bypass the domestic market to sell more abroad, said Miguel Angel Calvete, general manager of the Argentine Chamber of Chinese Supermarkets, which represents about 2,500 retailers throughout the country.

``Our consumers are competing with rising international prices,'' Calvete said in a telephone interview. ``We need to rebuild our own dairy market.''

Inflation in South America's second-biggest economy quickened in March to 0.8 percent from 0.3 percent in the previous month while annual inflation slowed to 9.1 percent from 9.6 percent in February.

Official Report

The National Statistics Institute, whose workers have said the government made changes of the officials in charge of the consumer price index to tamper with the data, last week revised the increase of the basic basket of goods after saying its price rose in March 3.6 percent. The revised report said the basket's price fell 0.2 percent.

``The price of the basket obviously rose,'' said Boada. ``Our surveys show an average increase of about 3.6 percent.''

Bloomberg (Estados Unidos)

 


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