Argentine Businessmen agree with President Javier Milei: they believe that the worst is over, seeing a rebound in sales

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They have noticed an improvement in the food sector, from noodles, oils, coffee, and rice to meat. The dollar and the possibility of the “V” recovery.The latest official data leave no room for optimism: a March economic activity collapse and the worst forecasts for the following months. At that time, the INDEC EMAE marked a drop of 8.4% year-on-year and a contraction compared to February.There are still no official records of what happened during April. Private consulting firms measured a virtual stagnation, perhaps a tiny contraction, compared to March.The latest estimate was made by Equilibra, the consulting firm run by economist Martín Rapetti. It accounts for a drop of just 0.5% in April versus March, without considering agricultural production, which this year is well above last year due to the drought effect.

And May? How are you closing the fifth month of the year?

“Measured in volume, sales register a slight recovery,” they say in one of the factories.“Profitability fell, without a doubt. Margins fell to minimums, especially in the basic food categories. We prioritize sales above all. We need to invoice to face fixed costs and for a typical strategy to sustain the ‘ market share'”, they add in the dialogue with iProfesional.On the other hand, another leading company points out, “There is still no reaction in the areas that are not basic,” which accounts for the drop in consumers’ purchasing power.

Meat consumption also improves.

Meat consumption also shows an improvement. Slight, but improvement at last, from historically low levels.From 39.9 kilos per inhabitant per year, in May, it would be closing with an increase of approximately 10% to about 45 kilos now, says Andrés Costamagna, a consultant in the meat market.This month’s positive trend is related to the stability in the price of cuts in butcher shops, but above all, in supermarkets, which offer offers in their refrigerators practically daily.“People once again perceive that meat is cheaper than other foods. The prices are fixed. The barbecue is closer to the salary because people’s income improves and meat prices have stayed,” says Costamagna.The same situation occurs with pork, which shows lower values ​​than beef cuts. A kilo of pork breast costs between $3,300 and $3,500.

“V “The letter of recovery

In the report that Time magazine just published on Milei, the President considered that “we are already at the tip of the short V” when reporting on the improvement in economic activity. The head of state insists that this reactivation will be rapid and upward.Food companies report an improvement, but more subdued, at least for now. For food entrepreneurs, this month’s balance closes better than expected. “We came out of a state of shock,” says the director of one of the leading factories.We have not seen a ‘V’ exit yet. The recovery is not going to be quick; the process is not going to be easy,” says Martín Cabrales, owner of the Cabrales company, dedicated to coffee.

The dollar effect

The companies consulted agree that last week’s jump in financial dollars did not alter the daily dynamics. “We look at the dollar, but it has no impact on the plans,” they say in one of the leading companies.The fear, however, is related to the – latent – possibility that the exchange rate gap will widen even more and that, in such a case, the supply of merchandise will be distorted. And that leads to inflationary pressures.That pernicious dynamic that occurred at other times did not exist at this time. Executives today are more attentive to sales and billing than to exchange pressures.They say, “As long as the official dollar does not jump, nothing changes.” For now, the recession still rules.Source: Iproffessional Translation
Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.The Gateway Team – When You are Serious About Propertywww.gatewaytosouthamerica.com

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