A growing currency crisis threatens a cornerstone of life in Buenos Aires: coffee. Argentina is tightening restrictions on imports to protect its precarious dollar reserves as it tries to avoid a devaluation that would bring even more turmoil to an economy with 71% inflation.
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Hardly any industry escapes unscathed and even importers of the coffee that has been drunk for generations in the capital’s famous cafes are feeling the effects. Consumers can be the following.
Martin Cabrales, vice president of Cabrales SA, one of the main suppliers of coffee beans to Argentine coffee shops, said that these restrictions mean that they are operating with minimal stocks and that it is a difficult moment, but that they are working with the production and central bank to try to meet demand.
Argentines consume 0.8 kilos of coffee a year on average, far from the volumes that are drunk in parts of Europe, as there is competition from the local mate, which is drunk with a gourd and a metal straw.
But coffee remains one of Argentina’s great urban traditions, drunk in cafes and bars in Buenos Aires, often with croissants or, increasingly, in trendy spots that embrace modern global coffee culture.
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Argentina imports all its grains, mainly from Brazil. With the peso losing 13% of its value in the last three months (the worst performer among emerging market currencies) and heading for a 26% depreciation this year, every dollar at the central bank counts.
That means that coffee, despite being an essential good, is not saved. Coffee bean imports amounted to $75 million through July this year, up from $66 million for all of 2021, according to the national statistics agency.
If they don’t get all the volume they need at a competitive price, both availability and pricing will suffer.
High prices driven by global supply tightening are not helping the equation.
And the shortage is not limited to coffee shops. Café Martínez, one of Argentina’s leading coffee shop chains, is struggling to secure affordable supplies of packaged beans for supermarkets.
Cristian Lema, managing director of Café Martínez, warned that if they do not obtain all the necessary volume at a competitive price, both availability and prices will be affected.
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At Tres, one of the trendy cafes in the Colegiales neighborhood of Buenos Aires, owner Agustina Román has already halved purchases as vendors deliver fewer bags due to restrictions. Román affirmed that coffee will become a scarce basic product and that for this reason its price will be even more speculative.
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