Imports feed consumption in Venezuela
Figures presented by the Central Bank of Venezuela (BCV) show that food production declined by 6.71% in July, 2012, compared to the same month in 2011. Between January and July 2012, the food sector in Venezuela shrank by 8.6%. Nevertheless, food, beverages and tobacco retail sales in specialized shops grew by 45.51% in July this year, in comparison with the same month in 2011
The performance of the food industry over the last five quarters has been negative and the downward trend is lingering. Figures reported by the Central Bank of Venezuela (BCV) show that food production declined by 6.71% in July 2012, compared to the same month in 2011. Between January and July 2012, the food sector in Venezuela shrank by 8.6%.
Different factors pose a threat to the industry. Obstacles to get foreign currency slow down imports of supplies and raw material. In addition, strict price controls keep enterprises operating with losses, especially the food production enterprises.
Conversely, food, beverages and tobacco retail sales in specialized shops grew by 45.51% in July this year, in comparison with the same month in 2011, according to BCV statistics.
Such figures reveal that domestic consumption is not being supported by domestic production. Consumption is then being fueled by the policy of massive imports adopted by the Venezuelan government.
According to data of the BCV, imports accounted for 31.1% of the total supply of products in the local market during the second quarter of 2012. This is the highest rate registered over the last 16 years and is 29.5% higher than the imports recorded in 2011.
In consequence, neighboring countries have become the main food suppliers of Venezuela. For instance, grain imports from the member countries of the Common Market of the South (Mercosur) rose by 375.32% from 2006 through May 2012, according to the National Institute of Statistics (INE).
Translated by Andreína Trujillo
A group of some 60 Venezuelan economists from across the country and from different generations and backgrounds, has met regularly in the past couple of years and now has brought forth a document explaining the reasons of the current emergency and outlining specific proposals on how to address the serious economic crisis the country has plunged into over the last three years.