Despite the fact that the dollar has fallen by -6.04% thanks to the solid macroeconomic fundamentals, the consumer has expressed his discomfort at not seeing that the fall in the safe haven currency is transferred to the prices of food and basic necessities.
Given this concern, experts consulted by La República specify that lower prices will not depend exclusively on the exchange rate, but on factors such as the strong inflation of world economy.
Rise in commodities and maritime transport problems
Since last August 2020, the corn, the wheat and the soy prices have increased in international markets, since they are part of the commodities.
Alejandro Narváez Petro, doctor in Economics from the UNMSM, explained to this newspaper that “the drought that Brazil and Argentina are going through has caused a shortage of soybeans and corn”, to which is also added the strong Chinese demand for them. grain next to american wheat “For fear of a possible shortage.”
Added to the above is the price of oil and fuel, “which has further increased the cost of international transport freight and of course also local transport,” said Omar Azañedo, CEO of Noncash.
According to Bloomberg, the costs for Sea freight they increased 292% through September 2021, compared to September 2020.
Stocks and market structure
Narváez Petro asserted, from a technical point of view, that a reduction in the prices of the products of the basic basket will not be reflected immediately because “there are still companies that have stocks or provisions that they acquired with a high exchange rate” and which will last for three months.
For his part, Juan Carlos Odar, director of Phase Consultores, added that, “if the reduction occurs in a very competitive scenario, it is more likely that the effect of the price drop on the final good will be greater on the consumer than on the consumer.” the case of a market in which there is an oligopoly or monopoly”.
When will prices drop for sure?
“We can see that from 2019 to 2021 our currency depreciated almost 20%, even being one of the strongest currencies in the region. After seeing that increase in the dollar in two years, of course, we can deduce that it also affected food prices and in general,” said Azañedo.
“The transfer will take between three and six months. Not because the exchange rate drops is going to lower the price of food so quickly,” said Javier Zúñiga, an economist at the University of Lima.
Meanwhile, Narváez explained that the recent fall of the greenback should have an effect on inflation, because, for each percentage point of increase in the dollar, the consumer price index increases between 0.1% and 0.2%. after a year.
“This means that when the dollar falls, the opposite effect should occur; that is the mathematical estimate that is made, but sometimes that does not happen in practice, ”he said.
Source: Larepublica
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