Rising food prices have long had a major impact on inflation. But last month in particular they did the highest incidence in the index High consumer prices since September 2016.
This is indicated by the calculations of the consulting firm Ecolatina, which predicts a rise in general inflation for 6.6% for February. Within this change, the increase in the food and beverage chapter, of 10.6%, explained 57% of the general level, the highest proportion of the last six years. INDEC will report the official data on March 14th.
The importance of the increase in food was such, they say in Ecolatina, that, “Had this item been excluded, the CPI would have gone up 4.4%.”
“As we expected, the increase was mainly driven by the jump in meat prices Vaccine (increased by 25.8% in the monthly variation), which responded to the increase in the price of live cattle, more linked to internal consumption, which was 50% from the second half of January.
As, meat explained 1.3 points of the increase in the general level. Also noteworthy are the increases in fruit (+17.9%) and vegetables (+10.4%), which remain at elevated levels due to lower supply due to drought, the consultant said in his latest report.
On the other hand, the value of the rest of the products – especially the packaged ones – included in the “Fair prices” program remained relatively lower (it recorded 4.1% for the third consecutive month, 2.1 points below the average for the month of September quarter – November, before the agreement).
Drag for March
Even for the consultancy EcoGo, which forecasts inflation by 6.4% in Februarythe biggest impact came from foods that recorded an average increase of 7.8% and leaves a trailing for March of 2.4 points. In the analysis within the category, in products consumed away from home (in restaurants or deliveries) the increase was even greater: it averaged 8.4%.
As for meat, both the rear and front cuts were the ones with the largest increases in the month, of 22% and 18.9% respectively. This implies an increase in the price at the counters of 19.4%.
According to EcoGo, fruits and vegetables also added volatility to the index, among the top, with an average increase of. 7.2%, the increases in citrus fruits affected by the drought stand out. Meanwhile, vegetables were up 8.1% and drinks and infusions They too contributed to the rise in the index: they increased by 7.8%, driven by soft drinks and alcohol.
Eco Go analysts point out that “the Fair Prices program was insufficientin a context where without an overall plan and with increases in the price of meat – which they are trying to recover after containing the indicator during 2022 – inflation does not stop”.
Going forward, according to Ecolatina, there will be factors that will continue to put pressure on food prices. Between them, the impact of drought on some fresh foods and the margin for a greater pass-on of the beef price adjustment to the consumer.
According to the same consultant, “although Fair Pricing may help moderate increases in some sectors, helping to moderate inertia at the margin, It has three major weaknesses that make it less effective.”
The first is that It mainly applies to supermarkets and hypermarkets, but not in small supermarkets or local businesses, where households in the lowest income deciles consume more.
Secondly, it is mainly composed of packaged goods, and the possibility of realizing a broad and robust agreement for fresh foods (fruit, vegetables, beef) lies in the great atomization of producers distributed throughout the territory, the high rate of informality present in some connections and the impact on prices of factors linked to seasonality, biological cycles and/or bad weather.
Finally, the third weakness that EcoGo highlights regarding fair pricing is the currency shortage, which will make it difficult to respect the part that belongs to the government: to guarantee greater access to the foreign exchange market, for which the risks of breaking some agreements are no less, he underlined.
Source: Clarin
