The competitiveness of Argentine dairy exports has recovered and is in a good moment

Other Milk

Dairy

Argentina

Market & Price Trends

Published Feb 20, 2024

Tridge summary

A report by the CREA Economics area suggests that the competitiveness of Argentine dairy exports, which had improved after a devaluation in December, could be at risk by mid-year. The report uses the Multilateral Real Exchange Rate Index for Milk Powder to track the relationship between nominal exchange rate variations and inflation in countries trading with Argentina. It also considers the impact of the elimination of export duties for dairy products in October 2023. The report warns that the devaluation effect on prices and the crawling peg exchange rate scheme could begin to deteriorate the competitiveness of Argentine export products. The article also highlights the need for specific policies and actions for long-term competitiveness.

Disclaimer: The above summary was generated by a state-of-the-art LLM model and is intended for informational purposes only. It is recommended that readers refer to the original article for more context.

Original content

The competitiveness of Argentine dairy exports recovered significantly after the devaluation implemented last December. But since then it has been blurring and is in danger of evaporating in the middle of this year. This Monday, the CREA Economics area published the evolution of the Multilateral Real Exchange Rate Index for Milk Powder (ITCRM-LPE) for the period between January 2000 and January 2024. The index shows the relationship between variations in the nominal exchange rate and inflation in different countries with respect to Argentina. From the interaction between both variables, periods of exchange appreciation or depreciation result that can result in less or greater competitiveness via price. “Thus, for its calculation, the relative participation of the main players in the world trade of whole milk powder is taken into account. In this way, exports from Australia, Chile, New Zealand, Ukraine and the European Union (EU-27) are weighted,” states the report published in ...

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