Argentina freezes commodity prices after talks break down


People line up at the Mercado Central wholesale food market, in La Matanza, on the outskirts of Buenos Aires, Argentina on April 1, 2020. REUTERS / Agustin Marcarian / Files

BUENOS AIRES, Oct. 19 (Reuters) – The Argentine government froze the prices of more than a thousand household items until early 2022 on Tuesday in an attempt to contain inflation, pushing back the measure by force after the talks broke off with the country’s main food industry chamber.

The center-left administration of President Alberto Fernandez, anxious to curb price hikes ahead of the November midterm elections, issued a resolution to set maximum selling prices for 1,432 consumer goods until January 7.

The South American nation is fighting to calm inflation which reached 3.5% for the month of September and is running at an annual rate of more than 50%, undermining savings and slowing economic growth.

Earlier today, however, the country’s main food industry coordinating chamber, COPAL, rejected a government proposal, criticizing officials for trying to bolster a unilateral deal.

“There are fractions of corporate management who are unaware of their privilege and refuse to adopt a collaborative attitude given the difficult situation Argentines face today,” said the Secretary of Commerce. interior, Roberto Feletti.

COPAL said in a statement that the government’s call for a price freeze had not given enough guarantees to the food and drink sector. The organization says it represents 35 chambers and more than 14,500 food and beverage companies.

“The steps taken so far reflect the authorities ‘unwillingness to reach an agreement with the sector,” said COPAL, adding that the government had not taken into account the companies’ proposals.

“The industry is not the cause of inflation but suffers the consequences”, added Daniel Funes de Rioja, president of COPAL, in the press release.

The standoff threatens to fuel tensions between the corporate sector and the government, which is looking to boost its popularity ahead of the November legislative vote, when it is expected to suffer losses in Congress.

COPAL said earlier that the agri-food industry was “ready to reach a price freeze deal”, but called for “real dialogue instead of unilateral decisions”.

Reporting by Adam Jourdan and Walter Bianchi in Buenos Aires Editing by Matthew Lewis and Leslie Adler

Our standards: Thomson Reuters Trust Principles.

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