Climateer Investing: "Argentina Applies Law That Jails Hoarders as Bread Surges"

Monday, July 8, 2013

"Argentina Applies Law That Jails Hoarders as Bread Surges"

Argentina was the breadbasket of South America and, if you go back to the late 19th century, was one of the 10 richest countries in the world.
From Bloomberg:

Argentina plans to apply a law that forces holders of wheat and flour suitable for bread making to sell stock on the domestic market in a bid to contain inflation.

Interior Commerce Secretary Guillermo Moreno announced the measure in the official gazette today. The 1974 law allows authorities to freeze prices and obliges companies to maintain supply. Those in breach are subject to fines and imprisonment.

“If the law on supply is applied, the one who should go to jail is Moreno himself,” former Economy Minister Martin Lousteau said in an interview with Radio Mitre today. “He’s to blame for the lack of wheat in Argentina.”

Argentine wheat production has decreased since 2006, when President Cristina Fernandez de Kirchner’s predecessor and late husband Nestor Kirchner set export quotas. Lousteau was appointed by Fernandez in December 2007 and resigned four months later amid disputes over a bill that sought to increase export duties, a move that led to a four-month farmer protest and failed to move through Congress.

The rising cost of wheat locally has pushed up the price of bread to 20 pesos per kilo ($3.70), double year-ago levels, according to Abeceb.com research company....MORE