RIO DE JANEIRO, BRAZIL – “The coffee issue is very serious; the latest measures have further restricted the small quota. The import procedures are beginning to be denied, and stocks are in danger,” assured Marcelo Salas, Café Martínez chain owner.
Coffee shop chains and coffee manufacturers are one of the most affected by the import restrictions. From the sector, they point out that their raw material is 100% imported and that they have no way to replace it: the coffee beans that are then ground and packaged by local manufacturers are not produced in Argentina.
Due to the increasingly limited quota for imports, the company Café Martínez had to reduce the sale of its packaged coffees in supermarkets and its exports to countries of the region to compensate for the lack of its main input and to be able to supply its 210 stores in the country, where some 3,000 people work, according to what Marcelo Salas, partner and director of the company, explained to Infobae.
The company Café Martínez had to reduce the sale of its packaged coffees in supermarkets and its exports to countries in the region to compensate for the lack of its main input and to be able to supply its 210 stores in the country.
“If the situation continues and we cannot supply the stores, the turnover would fall by 45%,” said the executive in a dialogue with Jorge Lanata on Radio Mitre and warned that in a month and a half, there will be no coffee in Argentina. “We have coffee stock left for 30 or 45 days”.
Salas revealed that his chain has nine price lists, and the calculations are millimetric because there are different prices depending on the zones. “There are specific increases that are made surgically to prevent sales from falling, and to accommodate people’s real possibilities. Clearly, the Argentine economy is not managed by those who practice them,” he lamented.
“Having to start paying for imports at the value of the financial dollar would be very sad because we would have to bring the product to double what it is today, which is already expensive.
“Today, it is already difficult for many people to have access to a coffee or breakfast, and this is a shame because many people in times like these replace something to eat in the cafeteria because they cannot afford it for lunch,” he explained.
The import limitations forced the coffee company to reduce its exports to the markets of Uruguay and Paraguay, where its products are marketed, and there are also stores of the brand.
“We were about to enter with the sale of coffee to supermarkets in Chile, and we had to back out. We cannot comply with the contracts, and rebuilding that channel will take us years; the trust is lost,” said Salas.
Another businessman in the sector, Martín Cabrales, said they are trying to find a solution to the crisis.
“Together with the Central Bank and Productive Development, they are trying to solve this temporary issue in the short term. We hope that everything will be normalized soon. Today the state of stocks is critical,” agreed the businessman.
Salas explained that since its beginnings in the 1930s, Café Martínez only went through a situation similar to the current one during the first Government of Juan Domingo Perón when they were forced to stop importing coffee and had to replace it with malt.
“The problem is in the measures taken and in the total disconnection with the chambers of the sector and with the businessmen,” assured the executive.
The quota granted by the Central Bank to access the dollars needed for imports is based on imports in 2020 and 2021, which were very low due to the effect of the pandemic. In that period, the international price almost doubled from US$5 to US$9 or US$10.
“All supermarket sales will be delayed because we have as a priority to supply the chain stores, where we have to protect jobs. We estimate that we are between 38% and 40% below in supermarket sales today. In the chain stores, 50% of the turnover is the sale of coffee beans (packaged) or to be consumed in a cup,” said Salas.
However, he pointed out that there was a time when they met with the authorities of the Central Bank to unblock imports but that, a few weeks later, the new measures – more restrictive – put them back in the same situation.
“They reduced our quota even more,” summarized the executive. Now, the expectation is to meet with Daniel Scioli, who is in charge of the Ministry of Productive Development.
“This is high season, and we are facing a combination of problems. In addition to the import restrictions, there are transportation problems in Brazil, the lack of containers for foreign trade, and, above all, the political frictions in the country that do not help. We need some tranquility and perspective,” he pointed out.
PROBLEMS IN ALL SECTORS
The latest measures of the Central Bank, which further tightened the import restrictions, generated a situation of extreme concern in the companies, which are already warning that the current difficulties in accessing imported products and goods for production will create shortages and price increases in the short and medium terms.
The concern is generalized in all sectors that, beyond the current situation, still do not know if they will be able to pay commitments already assumed in the next two months.
“This uncertainty translates into pressure on prices. Companies do not know if they can make the corresponding replacement. There is a set of dire situations. For the economy and production, there is nothing worse than uncertainty, which leads companies to make conservative decisions to protect themselves,” explained the Chamber of Importers of the Argentine Republic (CIRA).
When they cannot guarantee the next payments to their suppliers abroad, companies look for alternatives such as suspending sales, prioritizing or giving priority to some customers over others, or setting limits on quantities.
“In foreign trade, today’s restrictions are reflected over time. The effects will be seen as the weeks and months go by. The situation of uncertainty is serious and generates strong pressures and speculations,” warned industry sources.
Last June 27, the Central Bank tightened even more, the measures restricting imports: the import financing system -established last March- was extended to imports made under “Non-Automatic License” and to the import of services and will be in force for one quarter (until next September 30).
Therefore, companies must seek financing in dollars to make payments (through commercial credits abroad or their parent companies). The Government also decided to extend the tariff positions for goods equivalent to those produced in the country, which will have access to the market after 180 days, and for luxury goods, which will have access after 360 days.
CIRA has already requested an audience with the new Minister of Economy, Silvina Batakis, to raise the difficulties and also reiterated requests to meet with Daniel Scioli and Miguel Pesce, to formally express the need to pay for the goods that have already been committed. “99% of the local manufacturers import something,” they added.
As detailed in the sector, the problem affects all the importing companies in a transversal way. The complex processes and deadlines of foreign trade mean that the consequences can be seen in the short and medium terms.
“There are cargoes in the port of Buenos Aires paying days of storage, whose cost doubles after seven days, and there is cargo ‘floating’ (on the way) because it cannot be paid. These are cargoes scheduled at least 30 days ago or more,” they said.
“Today, cargoes are traveling to Buenos Aires that were purchased in February or March with an advance payment and are paid on delivery,” they said. The idea that companies can be financed within 180 days is very complex since it requires a relationship of trust with suppliers that many Argentine companies cannot generate in this context.
With information from Infobae