BUENOS AIRES (Reuters) -Argentina will loosen export restrictions on beef that were put in place in a bid to curtail inflation and had been panned by meatpackers, the government said on Thursday after a meeting with industry groups.
Argentina’s inflation hovers around an eye-watering 50% a year, while the poverty rate sits at 40%, factors that had pressured center-left President Alberto Fernandez to try to contain rising food prices by curbing beef exports.
After a meeting with the largest four farming groups, the government said it would remove restrictions on exports to emerging markets, while allowing premium cuts to be sent to Europe and the United States, among others.
Restrictions will remain in place, however, on the most consumed cuts in Argentina, in a bid to prevent those prices from rising.
The announcement will put an end for now to a standoff with the industry, which had proposed a different solution to increase domestic supply and tamp down inflation: fatter cows.
The sector chamber CICCRA on Thursday proposed that the government mandate a gradual increase in the weight of cows at the time of slaughter, which would over time increase the volume of meat for domestic consumption and exports.
“In two-and-a-half years we will have increased meat production by 600,000 tons with the same livestock stock that we have today,” the chamber said.
Argentine cattle currently must weigh at least 300 kilograms (661 pounds) in order to be slaughtered. The chamber proposed increasing that every six months until it reached 400 kg.
‘TOTALLY OPEN’
Argentina is a key global supplier of beef as well as a top producer of soybeans and corn.
The government’s interventions have generated uncertainty in the beef market after it limited exports of beef in the middle of the year to 50% of the previous year’s normal volume.
Ranchers wanted a “totally open” export market to ensure policy predictability, Carlos Achetoni, president of the Argentine Agrarian Federation, told Reuters before the meeting with government.
Nicolas Pino, president of Argentine Rural Association, said the industry was already providing plenty of meat for local consumers and that export limits were unnecessary.
The Agriculture Ministry did not respond to a request for comment.
Official data indicates that Argentina, a country of 45 million inhabitants with a bovine herd of 53.5 million animals, exported about 675,000 tonnes of beef between January and October, with 73.2% of shipments going to China.
(Reporting by Maximilian Heath, writing by Hugh Bronstein; Editing by Alistair Bell and Richard Pullin)
