What was the inflation in the first semester?

A survey carried out by the Orlando Ferreres consultancy estimated that retail prices rose 1.6% during the month of June

The inflation June was 1.6%, a range slightly higher than that of May, accumulating a rise of 13.1% throughout the first half of the year, according to a private report released this Wednesday.

The study prepared by the Center for Economic Studies Orlando Ferreres It calculated that retail prices experienced an increase of 1.6% last month, driven by the Clothing item, whose variation reached 6.5% in the period analyzed.

The survey considered that inflation registered a year-on-year growth of 43.8%, while during the first six months of the year it accumulated a rise of 13.1%.

Regarding core inflation, he underlined that it advanced at a monthly rate of 1.9%, which marked an increase of 44.1% annually.

According to the index released by the consultant, in addition to the Clothing category, in June the Equipment and operation of the home segment also jumped by 5.2%.

Then Leisure was located with a 2.5% monthly growth, followed by Housing along with Food and beverages with an increase of 0.9%.

The analysis maintained that the food sector “moderated slightly in relation to the dynamics observed during the previous month.”

As for regulated goods and services, he noted that “they registered a variation of 0.3% monthly throughout June, while the seasonal ones showed an increase of 3.4% monthly.”

The latest official data released by INDEC correspond to May, when inflation was 1.5% in a scenario in which clothing and footwear prices shot up 7.5% amid a slight reopening of the quarantine .

The institute led by Marco Lavagna pointed out that this occurred in a context in which “the drop in meat and derivatives, fruits, and non-alcoholic beverages in some regions had a negative impact and offset the increases observed in vegetables, tubers and legumes, and milk , dairy products and eggs. ”

New price freeze

The national government extended until August 30, inclusive, the Maximum Prices program but authorized that some of the products that make up the list can be increased.

Through Resolution 200/2020, published this Wednesday in the Officia Newsletterl, the Ministry of Internal Trade extended the Maximum Prices program for 60 days.

“The validity stipulated in Article 9 of Resolution No. 100 dated March 19, 2020 of the Ministry of Internal Trade of the Ministry of Productive Development and its amendments, until August 30, 2020, inclusive, “is announced in the Official Gazette.

Although the extension is announced until August 30, then it is clarified that this can be extended: “The period stipulated in Article 1 of this measure may be extended in response to the evolution of the epidemiological situation of Coronavirus COVID-19

“Due to the sanitary needs for contain and mitigate the epidemic alluded to, it should be noted that there have been general increases in the sale price of products both food for the population, as well as hygiene and personal care products; said increases, by companies of diverse economic capacity, are unreasonable and do not correspond to recent variations in the structures of production costs, “explained the Resolution published this Wednesday in the official text.

The Maximum Prices program is extended, but some increases are authorized

“That this togeneral price increase it especially affects the general well-being of the population by projecting itself within the framework of the expansion of the public emergency, “he explains.

However, the Ministry of Internal Trade in the same Resolution for the extension of the Maximum Prices program authorizes increases.

“In those cases in which variations in the cost structures that substantially affect the financial and economic situation of the subjects reached by the aforementioned rule, after March 6, 2020, may establish new maximum prices for the products included in said measure, which will be subject to the conditions established by said Undersecretariat “is clarified in the Official Gazette.

The program of Maximum Prices It also encourages “the companies that are an integral part of the production, distribution and marketing chain of the products included, to increase their production to the maximum of their installed capacity and to arbitrate the appropriate measures to ensure their transportation and provision.”

Frozen prices tension, can products be missing?

After learning, through the media, that the Maximum Prices It is extended for another two months, food companies and large retail chains know that it will be difficult for them to continue supporting current levels of supply to the public.

In the food sector, it is already discounted that there will be gondolas with even more space than at present as a consequence of the lesser “dedication” in supplying consumers with the almost 2,300 warehouse, hygiene and health products that have their prices frozen since last March 6 and that they will now maintain the same values ​​at least until the beginning of next September.

Large producers threaten to direct most of their efforts towards the products with the highest profitability and that are not reached in that list imposed by the Government to regulate the increases while the social isolation measures last to combat the Covid-19 pandemic.

Food: alert for late costs

They assure that the delay in costs is already well over 30% since they take into account that, in addition to this freeze that will now be in force for another 60 days, the industry accumulated since last year a delay due to the recession that the economy had been experiencing. and that it prevented the cost increases from being transferred to the price of food.

And they add that the pandemic brought additional costs that are not currently reflected in the final values. They refer to costs linked to the implementation of special protocols; replacement of excepted personnel to work during quarantine; bonds and parity fees and the devaluation of the official exchange rate, among others.

Overdue costs: Entrepreneurs say the recession had already put a damper on prices.

Overdue costs: Entrepreneurs say the recession had already put a damper on prices.

In fact, during these days the main companies in the sector approached the authorities of the Ministry of Productive Development with jobs detailing the structures of their costs and the evolution in the values ​​of the inputs they must use to produce.

They did it at the request of the ministry that commands Matías Kulfas and of the Secretariat of Internal Trade that directs Paula Spanish.

The objective of these works was convince officials of the need for price adjustments as a way of partially offsetting the gap that is occurring between the increasingly high production costs and the value of food in the shelves.

They were not lucky. The requests for virtual and physical meetings made by Daniel Funes de Rioja, head of Copal, the business chamber that groups Argentine food companies, did not even serve.

The business leader was unable to speak to the authorities to express his opinion regarding the continuity of the Maximum Prices program or the Care Prices program, which will also remain unchanged for another two months.

Frozen prices: what is the official decision based on?

The official decision was to sustain the price freeze for another period because it was understood that the conditions are not in place to allow increases in the midst of an economy in full destruction, with data on production drops that are frightening, with thousands of workers at risk and with the increasingly limited consumer purchasing power.

The message is aligned with the presidential premise of privileging health over everything else. “There is no margin for you to go up while the quarantine lasts and you must adopt sanitary measures that generate negative consequences for the economy,” is the phrase that is slipped from the Government House to block any request for an increase not only in food, but also in the rates for public services and other items such as telephony, Internet and cable television, which also maintain their rates under a strict price limit.

Food producers asked for a price update to the ministry that Kulfas commands.

Food producers asked for a price update to the ministry that Kulfas commands.

In the case of food, the measure also generates rispidity among producers and the main retail and supermarket chains, which are added to those already generated by the fragility of the payment chain of a sector that, although it never stopped its activities, also shows signs of recession and a sharp drop in its sales volumes.

It happens that manufacturers reduce or directly eliminate the bonuses that they usually discuss with their customers to force covert increases in prices that ultimately cannot be guaranteed on the shelves for lack of official authorization.

This was the case in recent weeks, when up to 60 different price lists circulated between suppliers and supermarkets, with increases of around 15% for some foods such as herbs, flour, noodles, sugar and oils.

A situation that is not new and that the sector anticipates will end as usual. That is, with shortages or shortages of products, despite the fact that the Ministry of Internal Trade promises sanctions to companies and chains that carry out these policies without justifications that validate these lower levels of production.

There was no way that the technical teams of this official entity accepted the business claims They even offered to implement a gradual scheme of transferring these expenses to prices to avoid a strong impact among consumers.

In this sense, official sources left a door open to future touches if companies can justify orders, although the sector ensures that for the next 30 days there will be no chance of turning this promise into reality.

For the future, everything will depend on the measures that continue to be applied against the coronavirus and on the decisions that the Government takes to reactivate the economy within the framework of the so-called “new reality” that will be launched in the country once the virus allows to release the sanitary stocks.

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Written by Argentina News

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