December 20, 2014
Business leaders react to beef exports restriction, call for gov't 'rationality'
The federal government has moved to restrict beef exports for a 15-day period seeking to stem the rise of prices in the domestic market. The decision was confirmed by Cabinet Chief Jorge Capitanich and sparked criticism by business leaders in the sector with some voices saying the strategy will have “no positive effects.”
The Domestic Trade office run by Augusto Costa will reduce permits authorizations for beef shipments. Over the past two weeks, cattle prices have jumped 10-15 percent, an increase likely to reach consumers as well.
According to the head of ministers, the government is conducting talks with the sector’s leaders “to set mechanisms that allow to agree on measures that allow to create conditions to control the flow of exports and the domestic market supply” in order to avoid an increase of prices.
“That is what th estate efficiently pretends to intervene (in) to guarantee the supply in sustainable conditions and convenient prices,” Capitanich said this morning in his daily briefing to the press at the government house, adding beef prices have climbed 54 percent since the beginning of the year, a hike that “has no relation with costs’ structure.”
For the minister, the rise responds to “speculation” fueled “constantly” by “media, economists and opposition representatives” that have “devaluation perspectives” and a “destabilizing interest” that led to the retention in the cattle market. Capitanich insisted there is also “speculation resulting from the increase of exports with the European Union toll and trade perspectives with the Russian Federation.”
No positive effect
Echoing the news, head of the CICCRA beef trade chamber Miguel Schiaritti criticized the government’s decision saying “it will be insignificant and will have no positive effect.”
The measure, Schiaritti told reporters, represents the “same ineffectiveness and ignorance over the (beef) sector” that ex Domestic Trade Secretary Guillermo Moreno had - widely questioned by the opposition and private-sector figures, Moreno was replaced in his post in December last year by Augusto Costa, a close aide of Economy Minister Axel Kicillof.
The CICCRA chairman explained the rise in cattle prices follows a restriction in the offer due to roads’ “bad conditions.”
“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 factories closed and losing 16,000 jobs,” Schiaritti said calling for “rationality” as he said “stopping the trade of six percent of what it is produced abroad can have no effect on the remaining 94 percent.”
In tuned with Schiaritti’s statements, head of the Buenos Aires City Butchers Association Alberto Williams said the decision to limit beef exports will not stop the rise in prices. “When hikes reach (shop) desks, nobody can stop them,” he warned.
In an interview with a radio show earlier today, Williams pointed out that prices in shops have jumped almost 12 percent over the past 20 days, adding beef demand has not been that big to justify the increase.
“As long as the Market of Liniers controls prices, we will continue this way. We are waiting for the cow to arrive knowing it is coming with a (price) increase; it is a deep issue that will not be resolved in one single talk.”