On April 14, INDEC will announce inflation for March, which according to analysts will exceed 7%. It is in this context of accelerating prices that the Government will have to negotiate more vehemently the price agreements reached with industry pursuant to the umbrella of the Fair Prices programme.
It happens that, products with Prices regulated with increases of 3.2% per month will be increased by practically half or less than the rest of the products marked by real inflation. With which, the companies are already trying to renegotiate the new terms of the agreement with the idea of obtaining permits to adjust prices a little more, they have entrusted to a large food company.
In this sense, April could be a “pivotal” month. in negotiations and some companies would get “the point increases” beyond the agreed percentage, citing the argument of having had significant increases in costs.
The price gap is even deeper with the nearly 2,000 products remaining with prices frozen under the Program through June. Albeit in volume, the profitability of companies seems more vulnerable than the 30,000 items that are capped at 3.2% per month.
According to a survey on the prices of 682 products of different brands and presentations carried out by the consultancy firm Focus Market, outside the big stores, they represent the significant difference between the prices under contract and the evolution of the rest of the market. “The average gap is 15% and in some cases as high as 35%, depending on the case”specifies Damian Di Pace, an analyst at that consulting firm.
To give a few examples: in the top 10 products that increased the most in March, according to these surveys, eggs showed an average increase of 41.8%; detergent, 13.4%; rice, 10.4% and butter, 10.3%. In other words, they all increased well beyond the 3.2% agreed with companies for regulated products.
According to Commerce Secretary sources, “companies are always asking for permission to charge higher markups for their products because they don’t want to lose profitability. However, our goal is to preserve consumer access to the most essential goods,” they underlined in the portfolio directed by Matías Tombolini. Among the latest numbers shown by the secretariat, there are 3,956 face-to-face inspections in March, across 2,584 businesses.
Since the program launched in February, they point out at that agency, there were meetings with more than 300 companies, with which compliance with the agreement was assessed. 600 agreements have been signed, with 47 different pattern chords, according to Commerce.
Although a slowdown in food prices was recorded in March compared to February, the upward trend in consumer products has not abated. Especially in March, a seasonally high month in terms of inflation. According to some private surveys (which include prices taken in supermarkets where Care Prices apply), the average monthly increase in products outside the price agreements was between 6.5% and 8%.
For the consultancy firm LCG, on a case-by-case basis, the food and beverage index recorded an average monthly increase of 4.7% in the last 4 weeks. In this survey, two food groups were found that grew above the overall average: bakery products, cereals and pasta that grow by 8.7% AND dairy products and eggs that are up 6% on average.
These fluctuations in the products that make up the basic basket in the local market contrast with the global trend of declining food prices. Over the past year, world food prices have contracted by 20.5%, according to FAO, the Food and Agriculture Organization of the United Nations.
The agency explained that “abundant supplies, weak import demand and the extension of the grain initiative in the Black Sea contributed to this decline,” it said, and also pointed out that prices continue to weigh heavily on the weaker importing countries”.
NS
Source: Clarin
