The Secretary of Internal Trade, Roberto Feletti, met this Monday with leaders of the milling sector to advance in the implementation of the Argentine Wheat Stabilizer Fund, the mechanism established by the national government to decouple the prices of the internal market from the volatility that present internationally.
The tool established by the Government is already implemented and has the first companies registered to receive the corresponding subsidies.
During the meeting, hehe milling chambers raised the will to participate in the Argentine Wheat Stabilizer Fund if some productive particularities of the sector are recognized and an improvement in the final price of the industrial flour bag, given the volatility that the world wheat market has acquired after the recent withdrawal of the Republic of India. The difficulties generated by the pressure of local exporters in the purchase of wheat for the domestic market were also raised.
As officially reported, The Ministry of Internal Trade promised to maintain the dialogue with the purpose of reaching an agreement between the parties.
For the implementation of the Stabilizing Fund, work will be done individually with each of the milling companies, since the intermediate agglutinating structures (federations, associations and other entities) do not meet the requirements to apply as recipients of the disbursements of the trust, which assigned to private companies.
Within the framework of these workshops, The Secretariat team will meet this Tuesday with directors of fresh pasta chambers, owners of pizzerias, empanada houses and related activities, noodle makers and bakers’ associations.
At Monday’s meeting, Feletti was accompanied by the undersecretary of Policies for the Internal Market, Antonio Mezmezian, while the representatives of the milling sector were Diego Cifarelli, president of the Argentine Federation of the Milling Industry (FAIM); Oscar Marino, head of the Association of Small and Medium Milling Industries of the Argentine Republic (Apymimra); and Oscar Marino, president of the Industrial Milling Chamber (CIM).
At the end of the meeting, the head of FAIM assured that it was a “positive” meeting and that although the authorities of the entity do not agree that the trust is the best mechanism, “the federation decided to release the businessmen and that each one take the decision that you think is appropriate”.
“Those who participate have the obligation by resolution of the Ministry of Domestic Trade to sell at the prices stated in the resolution. And those who do not participate will not receive any compensation, they pay (per ton) for wheat at the $46,000 they have today and sells the flour based on the price it pays,” Cifarelli explained in dialogue with C5N.
“That’s why we will surely be attending a mixed modelwhere there will be companies that want to attend this trust and others that do not,” he added.
In this regard, he said that the 25-kilo bag of flour was around $1,300, in average market value in February -prior to the start of the war in Ukraine-, and which is currently around $2,000, while the price of a ton of wheat went from $27,200 to $46,000 in the same period.
Lastly, he pointed out that the impact of the price of wheat on the bag of flour “is linear” since “80% of the cost is directly wheat, and the rest is labor, logistics and taxes”, therefore, the long one, “the flour ends up adjusting the same way that the wheat adjusts”.
The Argentine Wheat Stabilizer Fund was established by Decree 132/2022 of March 19, after the sustained increase in the price of food such as wheat, corn, sunflower and its derivatives from the start of the war between the Russian Federation and Ukraine, and establishes a compensation mechanism in the purchase price of bags of wheat flour from local producers, to prevent that price from being passed on to the final consumer.
As provided in resolution 355/2021, the price of 000 flour (25-kilogram bag) will be $1,150 under the trust scheme, while that of 0000 flour (25-kg bag) will be $1,380.
