Rice, dairy products, fruits, vegetables and meat, which could see a new jump in prices in October, put food inflation projected for the coming months on alert.
According to the official measurement of the Palacio de Hacienda, last week prices rose only 2% while the previous week they rose 2.1%.
The values of the item would grow above general inflation levels again in September, according to estimates by private consulting firms. According to Ecolatina data, during the first fortnight of this month prices grew 15.3% compared to the first fortnight of August. In this same period, food prices suffered an increase of 18.3%.
Meats, dairy products and vegetables led the figures for the first fortnight of September compared to the first fortnight of August, despite the fact that meat began a downward trend in the first days of September. Meanwhile, according to what was stated by the Federation of Grocers of the province of Buenos Aires, rice is missing from wholesalers’ shelves and is expected to rise by up to 40% in the coming days. In August the product had increased by 14.2%, above general inflation which was 12.4%.
According to data from the LCG consultancy, during the second week of September fruits registered an increase of 3.6% compared to the previous week, and vegetables 3%. Meats grew 2.1% and cheeses and eggs 2%. For Eco Go, the variation in food prices in the second week of September compared to the first was 2.5%. With the monthly increases, the consulting firm projects food inflation of 13.1% for the month.
Added to these data is another number released by Indec: domestic wholesale prices registered an increase of 18.7% in August of this year compared to the previous month, a figure that marks the pulse of the trend that will continue. have retailers.
Counting the indices for August, the month in which prices rose overall by 12.4% and food prices by 15.6%, consumer food prices have accumulated a rise of 692% since the beginning of Alberto Fernández’s administration. in December 2019. The number, which is an estimate by the Libertad y Progreso Foundation, represents 70% more than the total inflation figure in this same period, which amounts to 621.2%.
“Two issues influenced here,” Eugenio Marí, chief economist of the Foundation, explained to this medium. “On the one hand, we must not forget that inflation was already accelerating close to 8% monthly in the first week of August, driven by the continuous issuance of pesos by the Central Bank.” To this, he added, “was added the post-PASO exchange rate jump, which directly influenced the price of tradable goods.” The latter had a great impact on food prices, because “within the value chain there are a large part of goods that are traded internationally, and that adjusted their price after the rise of the official dollar,” he summarized.
In the same sense, Camilo Tiscornia, from C&T Economic Advisors, told PERFIL that the August inflation in food is partly explained because “some are linked to the exchange rate.” Added to this was the rise in meat “because producers are no longer liquidating so many animals.” For the economist, and in addition to the exchange rate, the price of fruits and vegetables grew as a result of seasonal issues.
“Food inflation was close to 16%, led by minced meat, which had an increase of 40% in a single month. Technically it was a hyperinflationary month,” said Daniel Adler, specialist in Financial Education, Entrepreneurship and Citizen Security.
“Although during hyperinflation we had months of 160%, 190% inflation, in today’s world having more than 12% in a month is hyperinflationary.” The economist explained to this medium that “although the books say that a hyperinflationary context is from 15% monthly”, with projected figures close to 200% annually, the context is “hyperinflationary”, something that “the services and products know” . Therefore, he added “it is not that they increase, they maintain the market value.”
In the particular case of food, he continued, the relationship between monetary emission and inflation is more evident because “it is something that cannot be grouped together, it cannot be disguised.”
Marí added that this inflationary acceleration “should function as a lesson on how to adjust the exchange rate without any underlying program, the only thing it does is increase the nominal value of the economy, without any positive effect on expectations.”
From Ecolatina they added that, although “the various freezes applied in recent weeks should temporarily contribute to a moderation”, the truth is that the risk of an increase is great, “taking into account an inertia that is consolidated on higher floors, the instability generated by the absence of anchors, the shortage of foreign currency, the lack of a comprehensive plan to lower inflation, the distortion of relative prices and the lack of confidence.”