20 February 2023
While the hacienda began an abrupt path of price decomposition, the government implemented various mechanisms to put pressure on meat packers so that the increases are not passed on to the consumer. Along these lines, this Monday they relaunched the program called “careful cuts”, through which companies must commit to delivering seven cuts of meat at prices around 30% lower than those of the local market. Meanwhile, on Tuesday it was added that companies must contribute 15 thousand tons per month of these cuts.
The Ministry of Economy thus hopes to influence the inflation rate for February, since meat is the item with the greatest weight in the Food and Beverage category, which in turn represents 24% of the Consumer Price Index (CPI).
At the same time, the government is also putting pressure on Customs and the Federal Administration of Public Revenues, which issued a report according to which they detected “under-invoicing maneuvers in 523 export shipping permits in the period 2021-2022, for export operations that they declare positions corresponding to bovine meat”. Such operations, indicated the report, involve 22 exporting packers with a total “under-invoiced” of US$ 11.9 million (0.2% of the exports in those two years). Some companies were unable to obtain export permits this week.
In addition, the meat export quota, installed in June 2021, which had fallen into disuse, was restored. That quota, which initially was 29,000 tons, to which tariff quotas are added, had been made more flexible until reaching 39,000 tons, but now it returned to the original volume.
For their part, in exchange for the contribution of cheap meat for the domestic market, the exporting meatpackers are seeking some concessions, such as excluding the buttock and shoulder from the cuts that are prohibited from exporting, the establishment of a special exchange rate for the sector — with a dollar higher than the official one — and that only export permits be granted to companies with a plant, among other requests.