The fund to lower the price of flour has almost no money left

The $ 25 million trust created to cushion the price of flour and noodles ran out of funds much earlier than expected. From the government they argue that the money to subsidize the domestic market has run out due to the increase in international grain prices and that they are negotiating with exporters and millers its continuity until the end of the year, as originally planned. This fund compensates the cost of the kilo of flour 000 and the package of half a kilo of dry pasta.

The fund is managed by the Secretary of Commerce Guillermo Hang. Last week, the official and successor of Roberto Feletti met with the leaders of the wheat industry to analyze other financing alternatives. “Meanwhile, private individuals were asked to contribute funds or finance the trust until a substantial solution is found, “an official source told this newspaper. The discussions are only at the beginning and their end is uncertain.

Officialized by the resolution to “decouple” domestic prices from international ones, the $ 25 million compensation mechanism It was established by an agreement with exporters, which planned to deliver over 800,000 tons of wheat to the domestic market this year to raise funds. And many others next year, to support the grants until January 31, 2024. As soon as he took office, Hang himself ratified the validity of the provision and almost all the recipes that Feletti was applying.

“This trust in particular is more relevant because it subsidizes the final consumer,” said an industry executive. He alluded to the other $ 400 million trust formalized in parallel with the increase in withholding taxes on soybean and petroleum derivatives, intended for subsidize the price of a 25-pound sack of flour used to make bread. The price difference of that standard bag is significant: at the market it costs between 1,800 and 2,000 pesos but with the subsidy it drops to 1,200 pesos.

Like other commodities, the international price of wheat has increased due to the Russian invasion of Ukraine. When he formed the “Stabilizer fund of Argentine wheat“, the ton of grain was quoted at US $ 368. It is currently around US $ 400 ma between March and April it fluctuated around US $ 470, its historical maximum value. It is worth clarifying that Ukraine is one of the world’s leading producers and exporters of wheat.

Faced with the sharp rise in international prices, the government has set a ceiling of 14.5 million tons of wheat to be exportedout of a total of 22 million collected in the last campaign. The “decoupling” theory. it has generated a certain resistance, especially in the milling sector, which rejects the formula of trust for fear of not being paid on time in a context of high inflation. The companies in the sector propose that these funds be destined directly to consumers (through a Alimentar card) or to bakers.

Hang is expected to hold meetings with companies linked to the grain supply chain to discuss alternatives to revitalize the compensation fund. It is still striking, despite everything, that the 25 million dollars have been exhausted in just over 3 months from the official date. It was supposed to last until December of this year.