High impact of milk on inflation worries Government

The Government is preparing changes in the rules for imports of milk powder from Argentina to attack the newest villain of inflation. After the tomatoes and beans, the Government is now concerned about the increase in the price of milk and the impact on price indices.
According to Government sources, the objective of the changes is to make the rules of the voluntary restriction of exports that Argentine producers have with their Brazilian partners which limits the sale of milk from Argentina to 3.6 tons of powdered milk every month.
"In may, Argentina exported only 1.4 thousand tons to Brazil and has not been for lack of dimensions. The Kirchner Government's policy is to hold the milk there to control inflation in the neighboring country. To alter the dimensions may not resolve, "says Rodrigo Alvim, President of the National Commission of dairy farming and Livestock farming Confederation of Brazil (CNA).
The official assessment is that imported milk need to get quickly to the domestic market to make some impact on prices-hence the priority to get the milk in countries near instead of import from other more distant markets.
The IBGE data show that, from January to may, the milks and derivatives accumulate high of 8.46% in the IPCA index, used as a benchmark for inflation targeting. The General index measures accumulated inflation of 2.88% on year.
The price of powdered milk rose in the international market because of a drought in New Zealand, the main exporter in the world. Ton rose from $ 3,600 in September last year for $ 5,500 at the beginning of the year. There have been some decline, but prices remain far apart last year.
In addition to the international offer shock, Brazil is in the off season, which runs from late April to September, where there is a natural increase of prices.
In Minas Gerais, the country's largest dairy basin, producers reacted with criticism of the Government's intention to allow more imported milk on the market. The new President of the Itambé, Alexandre Almeida said that the measure tends to have little result in combating inflation.
First because Argentina is not getting mail to Brazil the quota of 3,600 tonnes of milk powder per month. Second because the pressure comes from the international market. "The price of milk powder, which is the reference, is around $ 5,000 a tonne, which the current Exchange means $ 11.25 per kilo, not to mention the shipping costs. In the Brazilian market, the milk powder is $ 11.50. "
For Daniel, it would be more advantageous and efficient in combating inflation, milk payment by the Government of PIS/Cofins credits due to companies.
"Indirectly, we will be investing in primary production from other countries," complained the Executive Director of the Union of dairy in the State of Minas Gerais, Celso Moreira.
"The industry has a program to improve competitiveness and increase the national production 70% over the next ten years. If we regain self-sufficiency, we will depend more on imports ", explains Rodrigo Alvim.
The program designed by the CNA provides intensive training for dairy farmers, in addition to funding for acquisition of machinery and improvement in animal nutrition.