Argentina extends beef export cap until the end of October

Farm sector tensions in Argentina are rising after the government decided to extend beef export restrictions until the end of October.
calendar icon 1 September 2021
clock icon 2 minute read

Reuters reports that the Argentine government hopes to bolster the domestic meat supply and contain rising food prices, but the decision is stoking tension with the country’s powerful farm sector.

The move comes months before key mid-term elections, with center-left President Alberto Fernandez keen to avoid a sharp rise in the cost of beef in a country where families regularly gather to cook meat around the "asado" grill.

Spiraling consumer prices could hurt his party's chances with voters in the South American country already feeling the impact of the coronavirus pandemic.

The government had in June limited exports of some beef cuts until the end of the year, sparking tensions with farmers. A cap until the end of August on beef shipments at 50% of the previous year's level has now been extended by two months.

"In the short term, the tool of limiting sales abroad is essential to guarantee Argentine access to beef in the face of the sharp increase in prices for consumers," it said in a decree in the official gazette.

Argentina is the world's fifth-largest beef exporter and a key supplier to China. It is the top global exporter of processed soy and a major wheat and corn producer.

Jorge Chemes, president of the Argentine Rural Confederations, said that farm bodies would meet before deciding what action to take. He threatened rallies and trade halts.

"I'm certain we will have something along the lines of a trading halt," he told a press briefing.

Millions in losses

The president of Sociedad Rural Argentina (SRA), Nicolás Pino, said members would meet on 1 and 2 September and could then announce a commercial strike.

Earlier this year, protests by farmers led to the national livestock markets closing.

Argentina has suffered from high inflation for years, with the annual rate running above 50%, and has started to emerge this year from a recession since 2018.

Miguel Schiariti, head of Argentina's CICCRA meat industry chamber, told Reuters the sector had lost around $100 million in exports last month due to the caps, which could push up prices.

Another industry source said that they handed momentum to other producers.

"The government does not understand the damages of extending the cap, since the industry has lost millions of dollars with the restrictions so far and it is a way to continue giving markets to other countries," he said.

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Source: Reuters

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