CARACAS, Friday October 25, 2013 | Update

Central Bank of Venezuela reports serious shortage of 16 staples

In a report, the bank explained the need for further food import

Venezuelan authorities are to supply the market with massive imports from Argentina, Brazil, Uruguay, and Colombia (File photo)
Friday October 25, 2013  11:12 AM
In a report, the Central Bank of Venezuela (BCV) elaborates on the serious levels of shortage in Caracas at the end of September, particularly 16 food products with a shortage index above 41%.

The items include corn oil, not found in 98.8 out of 100 food stores; whole powder milk, 84.3; sugar, 80.8; pre-cooked corn flour, 73; wheat flour; 64.3, and butter, 58.4.

Pressured by staple shortage, authorities will resort to a massive import plan to bring food from Colombia, Brazil, Uruguay, and Argentina. The plan is to put food back on the shelves in the next two months.

Economy Vice-president Rafael Ramírez claimed on Wednesday, "We are preparing an attack: massive food import."

Imports are to be paid with US dollars in cash and bonds from public institutions' portfolios. Additionally, other countries would be allowed to pay their bills in exchange for food.

Paying food bills with bonds is a method the Venezuelan government has already implemented with Colombia, where different companies were given USD 600 million in bonds that can be sold abroad to obtain US dollars, Ramírez explained.

Today, Venezuela is faced with staple shortage even though sales of US dollars at VEB 6.30 by the Foreign Exchange Administration Commission (Cadivi) soared 40% in January-September with respected to the same period in 2012.

Ramírez has explained such contradiction is attributed to the wrongful use of US dollars by companies buying foreign currency through Cadivi. The official has remarked that food expected to be imported by these companies never hit Venezuelan seaports.

Although this might be partially accountable for low food supply, it is important to take into account the slump reported in Venezuela's domestic food production. Historically, price controls in Venezuela prevent producers from meeting costs and yielding profits, thus leading to lower production and shortage.

Translated by Jhean Cabrera