When ships arriving carrying sugar becomes the news in Venezuela

July 26, 2009

(Este post está en español aquí)


You know something is wrong in the Venezuelan economy, when the arrival of the ships carrying sugar is not only part of the news, but the Minister of Food feels like he has to make a big deal of it. Such are things under revolutionary Venezuela.

Because the shortages of sugar are essentially the Government’s fault. Recall that sugar was the first area where the revolution found the need to declare a priority. The Government first began bringing to Venezuela the same Cuban technicians who were responsible for the demise of the Cuban sugar industry. As if that was not enough, the Cuban Government sold us, like trinkets to the indians, their outdated sugar processing plants. For Hugo Chavez thsi was one of his first economic fixations, as Fidel took the money for the trinkets, child-Hugo told the world how self-sufficient we would become on sugar production.

But this was not enough, Chavez also had to go and start taking over the land where sugar cane is grown and divide it up and allow families to work small plots. Add to that the corruption surrounding the sugar processing plants (You may be wondering: Whatever happened to the US$ 500 million spent on CAEEZ,? Maybe by the end of the year it will be functional, only 5 years behind schedule) and you get the picture: Venezuela, despite the Chaves-cum-revolution in sugar, still produces only 60% of what we consume. Since by now the Government regulates and corners the importation of sugar, shortages are the norm, not the exception and they have been around since 2007. The reason is simple and it has become a vicious circle: With sugar under price controls, it is not interesting for everyone to compete with the Government in importing it. The Government and PDVSA buy and import it and then there is an over supply for a few months and then, the Government forgets it has to keep the flow coming, or forgets to pay for the last shipment. In a couple of months there are shortages, the Minsiter learns about them and the whole process begins again…

In fact, we are on the “high” on the milk cycle right now. PDVSA imported so much milk over a year ago, that the Government has reneged on contracts with Uruguayan producers and even has forgotten to pay them. The result is that right now nobody is worrying too much about importing milk. Wait a few months…

But the Minister of Food (or Feeding?) hails the arrival of 14,000 Tons of sugar last Wednesday  and says two more ships are coming, which he says proudly “will allow us to take care of possible shortages”

But, of course, it is not the Government’s fault. It’s your fault, or mine, or “the people” who have been hoarding it due to the “strong media campaign”. At least he admits at the end that there was that small matter of the Government not approving the foreign currency for importing sugar and you get the picture. There are shortages because we have all these stupid policies in place that delay and slow down everything. But don’t expect the revolution to admit that it is the bad policies that are to blame for the shoratges.

In the end, as absurd as it may seem, it is better for the Government to buy the stuff outright, than to start another grandiose and corrupt project which will cost the same but take years to generate the first Kilogram of sugar. I am sure somebody is pocketing some money bringing the sugar, but at least it gets here.

Of course, the problem is that this gets replicated in every sector that the Chavez administration wants to put its finger in and the way things are going, this will soon mean everything related to food in Venezuela.

And as the money gets short: Watch out, the arrival of every ship will be hailed not only by the Ministers but by the whole population, which will see each shortage at last over, a la Cuba, for at least a while, when the first sign of the ship is seeing over the horizon.

12 Responses to “When ships arriving carrying sugar becomes the news in Venezuela”

  1. Kyle Gipson Says:

    Cool info it is actually. My father has been waiting for this tips.

  2. Wow, amazing blog layout! How long have you been blogging for? you make blogging look easy.

  3. concerned Says:

    From Veneconomy:

    “(27/07/2009 01:14:52 p.m.) Sugar is coming:
    Two shipments with 12,500 and 20,000 tons of sugar will be arriving this week to join the shipment with 14,000 tons which is currently being processed at El Palmar in Aragua state. Also, the Minister of Food announced for the umpteenth time the Ezequiel Zamora Sugar Mill (CAEZ) will be soon inaugurated.”

    Is anyone tracking this sugar to see if it becomes the actual sugar produced from this newly inaugurated mill? Guaranteed sugar production for another Kodak moment for the revolution? Kind of like buying the radioactive Belarus milk and repackaging it here as if it was actually being produced in Venezuela.

  4. […] Cuando la llegada de un barco cargado de azucar es noticia en Venezuela Julio 27, 2009 (This post in English here) […]

  5. BigFire Says:

    Huh? Don’t Venezula used to export sugar?

  6. GWEH Says:

    Alpha, thanks for the link. The general is a patsy and fall guy. Moral of the story: You do not prosecute or denounce people close(r) to the President. This is nothing new in the IVth, Vth and most elsewhere.

    Certainly he was in a difficult situation of which I don’t know the details but it seems the general could have gone about it differently and obtained better results.

  7. Alpha Says:

    Hola Miguel,

    Lately I had an great and exciting interview with politic prisoner General de Brigada (EJ), Delfín Gómez Parra.
    And he is accused of an mismanagement of a dazzling amount “ Bs.”
    First I could not believe this amount and I ask this several times and every time it was confirmed. This all happened in the state of Barinas.
    We do not have to search far where that money is!!
    Read the interview in the Spanish or in the Dutch language.



  8. Roberto Says:

    You know, this is not the first time Venezuela imports sugar. It’s happened numerous times, but usually as either an exchange control arbitrage play or to bridge zafras. But Duquenal is right, unfortunately. Another example of the road to hell being paved with “good” intentions.

  9. GeronL Says:

    This happens because government cannot efficiently make the millions of choices every day that is the free market. It is impossible for government to make the right choice for every single person in their country and for every single business in their country.

    Geron, Texan, who hopes Obama doesn’t get ideas.

  10. Gringo Says:

    The BCV’s last full year for sugar production statistics is 2006 : 58% of 1997. The January 2009 Boletín Mensual lists monthly production for sugar through May ‘07, and greatly increased production, but nothing after that for 2007. The March 2009 issue does not list monthly production for 2007 for any product, and does not list 2007 sugar production. I wonder what Carlos Machado Allison has to say on this.
    I wonder if the early increased production statistics in 2007 were inaccurate.

    Click to access bo780ene.pdf

    Click to access bo782mar.pdf

  11. Milonga Says:

    Venezuela owes a lot of money to everybody. The question of Uruguayan milk was in exchange for oil, but Venezuela has not fulfilled its part. Bolivia has to import gas, while it used to be a power in South America on that issue. (http://www.lanacion.com.ar/nota.asp?nota_id=1155041), and I read somewhere that Venezuela is way behind in $$$ promised to that country, etc. Somebody should do an investigation on how much is owed and how many broken promises there are out there. I bet many will be surprised!

  12. You know Miguel, Yaracuy used to be a major producer of sugar. Now the lands have been “invadidas” by cooperatives that are unable to produce more than a couple of cows and some auyama…..

    Nobody talks about that, not even the opposition too afraid to walk “en el monte y culebra” preferring the safety of Caracas and the warm glow of TV cameras. This is a tremendous story of chavismo failure and no one to report on it.

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