In January, the gap between the amount producers receive and the final price consumers pay for agricultural products increased 3.8 times in January, according to a survey conducted by the Argentine Confederation of Medium Enterprises (CAM). This week, the results of the official measurement of retail prices and their fluctuations in the month of January will be known.
This gap between the shelf price and the income received by the agri-food sector is marked by the Origin and Destination Price Index (IPOD), prepared by the Argentine Confederation of Medium Enterprises (CAME). According to various private estimates, the data is known in the month where inflation in the food and beverage sector will have a notable impact on the general price index.
This Wednesday, Indek will release inflation data for January. According to President Javier Meili, there will be a clear slowdown in inflation in January, which should require it to be several points lower than the 25.5 percent measured by the Office of National Statistics for December. The ruling party points to a variation of about 20 percent, although this does not predict price stability in the medium term. According to the forecast by the Metropolitan University for Education and Work (UMET), workers’ wage inflation will be about 22.6 percent monthly in January.
CAME data reveal different dynamics on prices on the shelves, on the one hand the variability of prices in origin and on the other hand the increase generated by costs in the distribution and marketing of food. “On average, producer participation explains 26.9 percent of final sales prices.” This participation was higher in the case of red chilli growers (63.5 percent). At the other extreme, orange growers had the lowest share in the final price (11.7 percent), the report said.
Taking the fruits and vegetables category in general, IPOD observed a 5.6-fold increase in the price of a basket composed of 19 fruits and vegetables from producer to consumer. He said this volume represents an increase of 19.2 percent compared to the level of December last year.
“There are several factors that explain this monthly increase, including the lack of confirmation of final prices by the consumer due to declining purchasing power, adverse weather conditions that have affected some areas and production (ranging from high temperatures to excess or deficit) rainfall) and the end of the harvest season for some products and the beginning for others, including the realignment of prices at both ends of the value chain,” the report quoted.
Meanwhile, for the five livestock products and by-products that make up the IPOD basket for the region, “the consumer paid 3.2 times the amount the producer received in relation to the amount he received.”
Finally, the report identified the products with the largest IPOD lag during January. This group includes: orange (8.5 times), garlic (7.6), pear (7.5), onion (7.5) and tangerine (6.8). These products presented the largest differences between origin and destination prices. In the case of the first two, the difference came because “they presented increases at destination (63.3 and 24.1 percent, respectively), while their origin prices did not appear to vary.”
Meanwhile, the products that showed the smallest difference between producer and consumer price were: red pepper (1.6 times) which rose 28.9 percent at the origin and fell 27.7 percent at the destination, cabbage (1.9 times), strawberries ( 2 times) and eggs (2.1 times), leading to higher prices for both producers (0.6 percent) and consumers (3.3 percent).