The Secretary of Commerce proposed on Wednesday to the members of the entities linked to the chain of production and commercialization of wheat and corn “to advance quickly” in the formation of a trust as an essential instrument to guarantee the population’s access to 000 flour and the half-kilo package of noodles, within the framework of the Care Prices Program.
This was discussed on Wednesday during a meeting headed by the Secretary of Internal Trade, Roberto Feletti, accompanied by the Undersecretary of Policies for the Internal Market, Antonio Mezmezian, the Undersecretary of Actions for the Defense of Consumers, Liliana Schwindt, and the Undersecretary of Agriculture of the Ministry of Agriculture, Delfo Buchaillot.
On behalf of the private sector, Pedro Vignau de Maizar attended; Guillermo Garcia de Argentrigo; Ricardo Martins from the Buenos Aires Cereal Exchange; Gustavo Idígoras from CIARA-CEC; Fernando Rivara of the Collectors Federation; Francisco Schang from the Animal Nutrition Chamber and Ernesto Crinigan from the Center for Brokers and Agents of the Cereal Exchange.
Virtually Carlos Eiras from the Argentine Chamber of Feedlot and Andrés Emilio Ponte from MATBA-ROFEX joined
Spokesmen for the meeting explained to Télam that Feletti explained to the representatives of the production sectors that “the trust is an essential instrument for the purpose of guaranteeing the package of flour 000 and the package of half-kilo noodles within the framework of Care Price “.
In this sense, it was pointed out that the Government considers that if a tool is not generated that minimally decouples the international price of wheat from its internal price, the milling and pasta producers say that they have to absorb the cost of the price of wheat and cannot maintain the agreed prices.
The meeting took place at a time when Wheat closed again with strong increases in the Chicago market due to the escalation of the crisis between Russia and Ukraine, which led the cereal to rise US$11.7 to touch US$310 per tonto achieve its best price since November 2012.
Given this situation, the proposal of the Secretary of Commerce that was presented at the table this Wednesday afternoon is the need to affect 750,000 tons of wheat out of a total of 22 million of production, that is, the 3.5% that is considered would allow funding the trust to support the two mass consumption products.
The Government wants to keep the gondola price of 000 flour and half-kilo noodles stable, considered essential consumption.
“What is required is not to ask anyone to lose, simply to guarantee those 750,000 tons to ensure access to two essential consumptions for the population at a price that is consistent and not determined by international increases.“, explained the sources consulted.
The data from the technical teams presented on Wednesday made it possible to point out that “without this trust, the increase in the package of noodles would be 22%, something that is not going to be enabled or allowed because the idea is to generate a basket that acts as a reference and for those two products, 750,000 tons of wheat are required to guarantee flour and noodles at a reasonable price,” it was explained.
In this regard, the Buenos Aires Cereals Exchange (BCBA) and the Wheat and Corn Intersectoral Tables rejected on Wednesday the official decision to establish a trust after the meeting with the Secretary of Domestic Trade, Roberto Feletti and officials from the Ministry of Agriculture, Livestock and Fishing.
In two communiqués, the member entities of the Tables and the stock exchange entity once again rejected the official initiative, assuring that “this tool constitutes a negative stimulus that can affect the predictability in the chain.
For its part, the BCBA stated that “it would be more efficient to implement alternatives to subsidize demand and not supply” as “a series of measures that range from the use of coverage mechanisms, financing, and, fundamentally, proposals to reach vulnerable sectors, through food cards”.
Las Mesas also indicated that “the government must work on the real causes of inflation that exceed the price of corn or wheat, which were always below the inflationary rhythm throughout 2021.”
They also noted that “there are no supply problems in the national marketbased on the estimates made and insisting that the incidence of corn and wheat in the consumer price of processed products is very limited and any compensation mechanism will not generate benefits for Argentine families”.
Regarding the position of the producing sectors, government sources indicated that despite the rejection “progress continues, and the intention is to quickly close the issue within the framework of an agreement.”
Confidence in the understanding was signaled from understanding that “the Government and the sectors sitting at the table are fully certain that it is necessary to subsidize the price of noodles and flour in the context of international increase.”
As a reference, it was said at the meeting that all food-producing and exporting countries have some mechanism that allows them to unlink these prices and guarantee their population access to essential foods.
“Noodles and flour cannot be subjected to the ups and downs of international prices, and the state assumes that role of guaranteeing it,” the official source concluded.
