Food price rises almost three times more in Argentina than in neighboring countries

RIO DE JANEIRO, BRAZIL – An analysis shared by Argentine Rural Confederations highlights that the ratio continues to rise “because inflation is not adequately fought” in Argentina.

Inflation in Argentina is not easing. On April 13, INDEC published the hardest data of the last 20 years, monthly inflation of 6.7%. An index that in other countries is registered throughout the year. Even neighboring countries, like Argentina, are going through this context of global uncertainty and rising commodity prices -including oil and grains- but manage to face the situation differently, even without taking interventionist measures.

Recent INDEC data showed that in March, prices grew, led by education (23.6% monthly), clothing and footwear (10.9%), housing, and electricity and gas (7.7%).

Food did not lead the increases but registered 7.2% monthly despite expectations. Within “Food and non-alcoholic beverages” (AMBA area), bread and cereals rose the most (11.6% monthly), followed by dairy products (9.3%), and coffee, tea, and yerba mate (8.2%).

As in so many other products, food prices were immersed in the dynamics of inflationary inertia, which accumulates 55.1% per year and already has an annual estimate by the Central Bank’s REM consultants of an average of 59.5% per year for 2022.

Confederaciones Rurales Argentina explains in an analysis that “international price shocks due to the Ukraine-Russia war have specific impacts on prices”, and they state that “inflation problems are due to erroneous anti-inflationary policies, in an Argentine economy that has already accumulated four years of high inflation”, they highlight.

Now, it is worth analyzing how neighboring countries are facing it.

WHAT BRAZIL AND URUGUAY DID TO FACE THE PRICE SHOCK

Comparisons with neighboring countries are relevant.

In Brazil, food prices grew 2.42% monthly and 11.62% annually in March. The general retail inflation rate was 1.62% monthly and 11.3% annually, the highest increase in that month since 2015 (IBGE). Within food and beverages, corn grew 23.3% year on year and flour by 13.5% year on year. Wheat flour rose 18.02%, and potatoes and legumes grew 55.9% year on year.

“In an economy that also has items with higher inflation than food, fuels grew 28.8%, and transports 17.7% annually”, they point out. And they explain that “as can be seen, although there are some impacts of international prices, the country’s general inflation remains within the trend it had been following, and there are no price controls”, the CRA report states.

On the other hand, the analysis indicates that in Uruguay, food prices rose 2.43% monthly in March, driven by legumes and vegetables. “The Consumer Price Index (CPI) grew 1.11% monthly and 9.38% annually in March (INE), remaining outside the government’s target of between 3% and 7% annually. Within Food and non-alcoholic beverages, bread and cereals increased by 1.82%, meat by 2.32%, milk, eggs, and cheese by 4.24%, fruits by 1.14%, and vegetables by 5.9%. Also noteworthy are increases in gasoline (2%) and diesel (1.98%), among other items”.

In the attached chart, CRA analysts explain that “from the comparison with Brazil and Uruguay, also producers of grains and food, lessons can be learned on how to face inflation, without interventionist measures that discourage the production and do not solve the inflationary problem, but rather aggravate it,” they explained.

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