2023-08-30 00:22:00
After the devaluation and the uncertainty generated by the electoral result in the PASO, different consultants estimate that inflation might reach double digits. The food item, one of the most important in the index, would be boosted by the large increase in the price of bovine meat.
Although there are still no official statistics that specify the increase in meat, the IERAL of the Mediterranean Foundation estimates that its price might have reached $3,100 per kilo by the end of the third week of August (averaging the value of 18 cuts), with a variation from the start of the month of the order of 55-60%.
Due to the substitution effect, it is to be expected that the other meats and animal proteins have also had significant increases”, indicated the consultant.
Regarding its impact on the family budget, average spending on animal protein is around 8% of total spending (on average, including 3 meats, cold cuts, eggs, processed hamburgers, etc.).
“Taking this last percentage as a reference, and working with an increase in consumer prices of this group of products of between 40% and 50%, the contribution to inflation in August might be in a range of between 3.2 and 4 percentage points”, the report noted.
Food prices increased 4.1% since PASO
“Although the last week of the month remains (which will define whether or not the price jump is maintained), it is very likely that in August 2023 it will be observed the largest price jump (in real terms) for beef in at least the last 18 years (2005-2023) and therefore the greatest contribution to inflation of this product in the measurement of official organizations,” he warned.
What is the rise in meat due to?
Behind the sharp rise in consumer prices for beef is a large increase in the price of live animals.
Between the third week of July and the third week of August, the price of the steer in the Mercado de Cañuelas (ex Liniers) rose a 70%.
The factors that explain the rise in farm prices seem not to be so evident.
“Among the hypotheses are a possible imbalance due to seasonal issues between the supply and demand of animals destined for export, the need to rebuild margins in the feedlots (affected by the Corn Dollar and other factors), and a very complete and fast past through of the post-PASO devaluation of farm prices due to retraction and/or less availability of animals, among others”, the Foundation specified.
A private study warns that consumption plummeted in August
What is expected?
As for how the prices of ranch and meat can follow, will depend on the response of consumers, if it validates the new values or, on the contrary, limits consumption and, on the exporters’ side, if businesses continue to be profitable at the new prices, with an exchange rate that would remain at $350 until the general elections in October.
“Regarding the latter, it should be noted that the prices in dollars of local finance were well above the values of the region (Brazil, Paraguay, Uruguay), which it limits the competitiveness of exporters and sets a certain ceiling on values for the coming weeks”the report concluded.
LD / Give
1693355662
#increase #price #meat #August #largest #years
