Chavez brings poverty to Venezuela

Venezuela to Import Coffee 1st Time Ever
Source: Reuters23/07/2009

Caracas, July 22 - Venezuela, a traditional coffee exporter that boasts one of the best cups of java in South America, may have to import coffee for the first time ever this year or face shortages, industry experts said.
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Producers say rising costs and prices fixed by the government have caused production to fall and illegal exports to rise. The government says poor climate and speculation by growers and roasters is to blame."There is a serious shortage," Pedro Vicente Perez, coffee director with the national agricultural federation, Fedeagro, told Reuters."This is the first time ever Venezuela will have to import large quantities of coffee," Perez said.Most estimates of how much Venezuela needs to import hover around 300,000 45-kg bags, to ensure supply until the 2009/2010 harvest begins in October. Experts say Brazil would be a likely supplier."We're talking about two months of supply," Nelson Moreno, head of the small and medium-sized roasters, told Reuters."Stocks, including reserves, will be entirely depleted by the third week of August," Moreno said.The 2008/09 harvest that ended in March produced 1 million to 1.2 million quintales, or 46-kg bags, compared with 1.5 million bags in previous years.At the same time, demand has grown to around 150,000 quintales a month, or 1.8 million quintales a year, said Moreno.Venezuela is known to produce some of the best quality Arabica coffee anywhere and, unlike many countries in the region, traditionally consumed most of it itself.But more recently large quantities of coffee have been smuggled across the border to Colombia, where prices have been more than double the fixed 470 Bolivares ($218) per bag that producers are paid in Venezuela.The U.S. Department of Agriculture in a May report estimated that 250,000 bags were shipped abroad during the 2008/09 harvest.On-and-off food shortages for years have dogged the government of President Hugo Chavez, a former paratrooper who has nationalized several industries and expropriated land as part of his socialist revolution.Critics point the finger at price and foreign exchange controls that have slowed investments in expansion and maintenance and eroded productivity. The government blames shortages on speculation by the private sector.A shortage of milk and beef contributed to Chavez losing a referendum in 2007 that would have granted him vast new powers.Last week, Agriculture and Land Minister Elias Jaua said that the shortage of coffee, rice and sugar was due to climatic reasons. Imported sugar would reach the domestic market in coming days and the government will announce a host of measures to ensure the coffee supply, he said.Government officials and roasters began talks this week to discuss possible imports."The place with stocks of Arabica is Brazil, and the government has good ties with Brazil," said Moreno.The ministry of food supply confirmed the talks but offered no further comment.