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ECONOMY | 31-08-2021 15:23

Government extends beef export limits, producers threaten response

Argentina’s government on Tuesday extended beef export restrictions until the end of October, prompting an angry response from producers.

Argentina’s government on Tuesday extended beef export restrictions until the end of October, prompting an angry response from producers.

Exports will remain limited to half the 2020 average, said a resolution published in the Official Gazette, with existing exceptions (including the sale of some cuts to the United States and Israel) retained.

The Alberto Fernández administration says the restrictions are an attempt to moderate skyrocketing domestic prices. It said steps first introduced in May to limit beef exports have started to bear fruit by abating meat price inflation that reached 76.2 percent year-on-year in May. 

The country is reeling from three years of recession and adverse economic impacts from the coronavirus pandemic. Increases in the price of meat helped boost inflation to 51.8 percent year-on-year in July, according to the INDEC national statistics bureau. Prices rose by 29.1 percent between January to July.

Argentina is the fourth-largest exporter of beef in the world, and one of its biggest consumers per capita. But poverty affects 42 percent of the population, and the government is trying to reduce the cost of living by implementing price controls.

In May, President Fernández's government slapped a one-month suspension on foreign meat sales.

In June, it announced a progressive resumption of exports but limited to 50 percent of last year's average monthly volumes until the end of August – a deadline now extended by two months. The government has also prohibited the export of seven cuts popular with consumers for use in asados until December 31.

The measure, signed by Agriculture, Fisheries & Livestock Minister Luis Basterra and Productive Development Minister Matías Kulfas, said that the limits introduced by the government had "met the objective of reducting price dynamics," yet argued that “in the short term, limiting foreign sales is an indispensable tool to guarantee Argentines have access to beef in the face of the sharp increase in consumer prices,"

Argentina exported some 897,500 tons of beef and cow leather worth US$2.7 billion in 2020, primarily to China, neighbour Chile and Israel, according to INDEC.

Beef consumption in Argentina has been declining year after year, from a peak of 69.3 kilogrammes per person in 2009 to just under 50 kilogrammes in 2020, according to the CICCRA industry chamber. 

Producers reacted angrily to the news, with Nicolás Pino, the leader of the La Sociedad Rural (SRA), accusing the president of having broken “his word.”

"The decisions made by President Alberto Fernández are not good for Argentina. He did not keep his word and the ideology overcomes rationality, impoverishing everyone," he said.

“We are not happy because the decisions made by the National Government evidently harm the entire country.”

President Fernández "had told us that as soon as prices stabilised, exports would open,” he said. “But here we are, with a fait accompli and the president's word was not kept.”

The business chamber claimed in a recent report that meat producers had lost out on trade worth more than US$1.084 billion since the Casa Rosada imposed its ban on exports.

The Mesa du Enlace liaison board – which groups together industry groups Coninagro, CRA, Federación Agraria Argentina and Sociedad Rural Argentina – will meet on Tuesday to decide on next steps, with sources saying strike action is on the table.



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