Business & Economy

Colombia welcomes Christmas with inflation, scarcity of basic products

By Hugo Penso Correa

Barranquilla, Colombia, Dec 21 (EFE).- Colombians are preparing for the Christmas and New Year’s holidays with an economy that is clearly recovering after the worst – so far, anyway – of the coronavirus pandemic, but the local market is facing dramatic rises in the prices of basic items like beef, chicken, milk and eggs.

The phenomenon of world inflation is also hitting Colombia and, according to the National Statistics Department (DANE), over the last 12 months inflation was 5.26 percent, significantly above the target of 3 percent set by the Bank of the Republic, which is the South American nation’s monetary authority.

Beef prices are 30 percent higher, the price of chicken has risen by 25 percent, eggs by 13 percent and milk by 10 percent.

The explanations for the price increases in these products is linked with, among other things, the world container crisis, which is affecting Colombia due to the difficulties of importing food products, the May and June protests which hurt the economy’s dynamism and the Covid-19 pandemic.

The director of the Association of Cattle Raisers of the Northern Coast (Asoganorte), Julian Saade, said that in 1022 “the upward trend in the prices of beef and milk will continue.”

Saad said that, for example, international demand for Colombian beef is not going to cause the price to go down on the local market.

“On the contrary, it’s a reality that’s going to sustain itself in the coming years,” Saad told EFE by way of explaining the relationship between supply and demand for the product.

He added that the situation is similar for milk due to its “connectivity” with the production of beef.

“When the price of beef rises, the cattle raiser tends not to milk the cows and give it to the calves to improve the fattening process,” he said.

He said that the “international price of powdered milk,” one of the products that Colombia imports, is high and with the dollar exchange rate very high it amounts to about 4,000 pesos, which “discourages its importation and, in the end, raises the price.”

He also said that agri-livestock supplies, medicines, herbicides and insecticides have also risen in price and that is influencing the final cost of the products that come to Colombians’ tables.

Throughout the country the high prices of meat are affecting not only consumers but also businessmen, who are having greater and greater difficulty selling a product that can now be considered “a luxury.”

Ramiro Cantillo has worked for three decades in the Bazurto market in Cartagena and said that “the forecast is that if things go on like this, we’re not going to have any beef.”

“It will be taken to the big stores where the middle and upper class buys and in the informal markets, like this one, they’re not going to be able to distribute beef because those who come here to buy are just the common people,” he told EFE.

Cantillo said that a kilogram (2.2 pounds) of beef that cost 16,000 pesos (about $4) eight months ago, now goes for 22,000 pesos (about $5.50).

Iris Fabra, who sells cheese, chicken, eggs and other food products on the Bazurto plaza, said that it’s unfair for people who buy milk products from wholesalers all year long and then during the holidays due to the high prices and foreign demand they “prefer to leave people without cheese.”

“Each week, they sent me 100 kilos of semi-hard cheese and now they don’t send me even a little chunk,” she told EFE, adding that the same thing is happening with other products like chicken.

“Any business will go bankrupt like that, with just 500 pesos of profit (about 12 US cents),” she said.

Even beer began to get scarce in mid-December in several regions in Colombia due to a “product supply crisis,” says Bavaria, Colombia’s main beer producer.

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