Argentina to import Brazilian tomatoes to protect new price caps
Argentine consumer prices rose an estimated 26.8 percent in November from a year earlier, the fastest pace in at least two years, according to a monthly report published by opposition lawmakers. Inflation is quickening as the government floods the economy with pesos to maintain social spending while weakening the exchange rate. The government will take a loss on the tomato imports to maintain its fixed domestic price of 10.5 pesos a kilo ($0.72 a pound), according to Luciano Cohan, head economist at research company Elypsis. “The majority of fruits and vegetables are produced locally,” Cohan said in a phone interview in Buenos Aires. “It’s ridiculous to think the government will assume losses in order to try and keep inflation in check.”
Argentina will turn to imports to head off any price volatility in other products that would alter the availability or prices of controlled goods, Capitanich said. “These are measures that have more of an impact in the media rather than on the economy,” Cohan said. “It gets us all talking about the price of vegetables without addressing the root causes.”
Source: bloomberg.com
