The CPI that INDEC will broadcast tomorrow is already old. Traditional stores are receiving new price lists and the scenario is complicated
By Claudio Zlotnik
13/04/2023 – 07,00hs
The price of kilo of chicken increased 100% in 100 days, and is already worth around $1,000 to the public, according to the latest measurement by Capia, the industry chamber. Barely a couple of points below, eggs became more expensive: the maple that cost $650 after last Christmas is now selling for $1,700 in the city of Buenos Aires. Prices, of course, show no signs of slowing down.
Chicken and eggs are impacted in a double way: to the inflationary dynamics the effects of the bird flu, which forces the slaughter of hundreds of thousands of birds in hatcheries infected by the disease.
The problem is that the drawbacks are not limited to those extreme cases. What happens again in this beginning of April is that the new price lists are raining. The novelty is that the increases already have a floor of 7% per month, which confirms that the inflationary escalation does not stop.
This Friday, when the INDEC releases the CPI for March, it will probably confirm that inflation will jump to 7%. From the price lists that companies are sending to wholesalers and supermarkets, it is clear that the index will remain at those values also in april. In any case, the businessmen themselves fear that -within a few weeks- they will have to speak of a floor higher than that 7%.
The latest reports from the consultancies that monitor the evolution of inflation week after week revealed a traumatic fact: LCG –the consultancy founded by Martín Lousteau– detected that half of the prices moved up during the first week of the month, a range above what happened in the previous weeks.
For Eco Go, the scenario was somewhat worse: six out of ten surveyed products changed their price last week.
Setback in the fight against inflation: food registers strong increases.
Prices: The Eye on Groceries
outside of the fresh food -such as meat or eggs- which registered strong increases in the first weeks of the year, are now also adding some packaged productseven several that are supposedly under the control of the Secretary of Commerce.
To make it clear: one thing is what happens in the large supermarkets -whose managers are prohibited from accepting new lists with increases of more than 3.2% per month- and something very different is what happens outside these large stores.
For this reason, in large chains you can see some empty gondolas, due to lack of products. It is logical: the gap between prices in supermarkets and traditional stores is increasingly noticeable.
The largest increases at the beginning of this month occurred in several of the controlled products: grass, rice, dairy products, noodles, and non-alcoholic beverages.
The question has, logically, a political angle. A few days ago, the Government admitted a poverty jumpthat already around 40%.
There is a new phenomenon in the Argentine economy: poor workers, who do not have enough salary due to the brutal loss of purchasing power. The unemployment rate remains at low levels (6%), but the poverty line continues to rise, with inflation of the basic basket that already exceeds 115% per year.
Prices: the differences between supermarkets and smaller businesses are accentuated.
The increases that drive inflation to a new notch
Here are some of the strongest price increases being recorded:
- Yerba. Businesses are receiving average 30% adjustments. And there will be more increases in the coming weeks. The explanation is at hand: the Government, through the National Institute of Yerba Mate (INYM), authorized an immediate increase of 52.9% in the price received by yerba mate producers. But it was not the only increase that enabled: there will be successive increases in May, of 4.7%, and in June, of an additional 7.1%. In total, 60 days from now, the price of yerba at the wholesale level will adjust by 71.5%.
- Rice. Lists arrive with increases of an average of 20%. The key is that, due to the drought, production in the rice-producing provinces -Entre Ríos and Corrientes- plummeted by around 30% last year.
- Dairy. The sector suffered a severe blow due to the drought. It is estimated that production will suffer 30% this year, and in this context there are weekly increases in products. And also missing. Companies, in order not to lose so much profitability, are turning production to items with the highest margin. For example, hard cheeses to the detriment of fluid milk.
- Videos. There were increases of up to 15% this week, well above the guideline agreed by the Government with the manufacturers. Supermarkets remain with more moderate increases.
- Legumes in cans. Most legumes had a sharp drop in production, also due to the drought. Prices have been accelerating in recent weeks, with lentils, peas and corn grains leading the way. The companies warned supermarkets that prices will continue to rise in the coming months.
- Tuna. Usually, the price of tuna adjusts to the evolution of the official dollar. However, the problems to import products, in the midst of the obstacles, put pressure on the prices of the cans. The tuna usually comes from Thailand and importers began trading with an intermediate dollar, between the official and cash with settlement.
Outside of food, the paper It is one of the most expensive items. The cost of raw material (cellulose) registered a strong rise at the international level. In Argentina, the increase was 175% in the last five months, according to the editorial that publishes Crisis magazine. It was the product of increases in the world due to the pandemic, the war between Russia and Ukraine and the paralysis of a strategic plant in Finland, the main paper producer in the world.
