Economy

Argentina: import restrictions, devalued peso lead to lack of products

Sep, 13, 2022 Posted by Gabriel Malheiros

Week 202237

Argentine Federico Loyola, 32, has been trying to buy a brand new car since March. “I have talked to car dealers, imports, and even went to other provinces, but there weren’t any cars. Few are available when new models come to the market, so I coulnd’t choose the model or the color. When I decided on a domestically made car, they calculated a delivery date that never came because of the lack of [imported] auto parts in the country to finish them. I’ve come to terms with the fact that I won’t get a new car this year,” he said.

With a lack of dollars, import restrictions imposed by the government to limit capital outflows, and high inflationary prices, Argentines are losing access to many goods imported or manufactured with inputs from other countries. There are also numerous instances of buyers turning to the parallel market, which always strengthens during these times.

The constant devaluation of the currency and excessive inflation, projected at 90% for this year, made the price of imports soar.

A Folha press reporter tried to buy a new computer in an authorized Apple store. The vendor,  incredulous, asked: “Don’t you know anyone who is going to travel abroad and can buy it on your behalf? Can’t you buy it in another country?”.

He explained that customers usually go to the store just to look at the models displayed and then decide which one to buy abroad. “It’s not worth buying here at all,” he insisted.

There were only two units on the stock of the model asked. One of them was at least four generations old and cost three times the price of a more modern version in Brazil or Chile.

“But then what do people buy here?” The merchant, unshakable, replied: “headphones, accessories, and they come to ask if we know anyone who does a ‘scheme’ [bringing clandestinely].”

How could one possibly prevent the piracy of gadgets and computers when there is money piracy? There was a phone number available for text messaging to set an appointment to make a payment, in dollars, at the same quotation in the US at the moment time, and someone would deliver the product in one-month time.

There are also reports of imported products that are still available in the country, but prices are not guaranteed to remain the same for more than 24 hours. On the same occasion, the report team decided to replace the computer battery. “That we can do; it costs 80 thousand pesos today.” The price was only valid for that very same day. “The value may change tomorrow depending on the parallel dollar.” The same goes for beauty products, bags, or any item that requires imported inputs.

Purchase restrictions are not limited to luxury items like Scotch whiskey, salmon, or expensive computers.

The producer and seller of alfajores, Daniel Morales, from Salta, apologized on his social networks for not distributing his traditional alfajores because he couldn’t find wrapping papers or material to ship them to other places. “We lacked even paper and ink for printing the labels. We had to do everything by hand and improvise the packaging. We are sending our alfajor all over the country, but I’m sad because the product lost a little bit of its identity.” Morales included a letter apologizing for the drop in product quality in each package.

Even the coffee market felt the impact of the Argentine economic situation. “Is there anything more traditional than going to confectionery and ordering a coffee? Event hat is at risk now, as we can’t guarantee supply after September when we will run out of stock,” said Gerardo Biaggi, manager of the Café Martínez in the neighborhood of Belgrano.

Those who expect Argentine wine to be cheaper after so many depreciation rounds can expect a price reduction but will have to be content with a more “artisanal” presentation, as imported cardboard boxes and bubble wrap may be scarce. “I often get the question as to whether I ship wine to the United Santos, but I explain to foreign customers the tricks to conceal bottles in their suitcases without attracting too much attention as doing so would cost less than triple the price of sending them by mail,” comments Álvaro Pruat, an Argentine wine exporter.

The gap between the value of the US currency in the official quotation (145 pesos) and the parallel quotation, known as “blue dollar” (295 pesos), causes prices to be constantly reassigned.

Imports to Argentina are made at the official exchange rate through currency quotas assigned by the Central Bank to companies based on purchases invoiced in previous years.

With this mechanism in place and the increase in international product prices, importers have to reduce the volume of purchases.

Source: Folha de S. Paulo

To read the full original article, please go to: https://www1.folha.uol.com.br/mercado/2022/09/restricao-a-importacoes-e-dolar-caro-levam-a-falta-de-produtos-na-argentina.shtml

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