I don’t know if I have been distracted lately or if I was just not paying attention. I have been hearing for weeks about the problems with shortages of diapers and sanitary napkins (an almost daily topic of discussion by the women in my office), but to tell you the truth, I was stunned when I went to the supermarket on Tuesday and saw all the empty or semi-empty shelves. Thinking that it was just coincidental, maybe the shelves had not been replenished from the weekend, I thought by today things would go back to normal.
No such luck, the shelves looked even worse. On the left you can see the paper products shelf, looking truly empty, only one brand of diapers available. On the right, the ready-cut meat shelves looked depressingly empty:
On the left below, the vegetable oil shelf. It may look full at first sight, but when you look closer you realize there is only one brand today and a sign that says: “Limit one bottle per costumer”. On the right the cleaning products section also looked somewhat desertic and once again, for many products you could only find a single brand.
On the left below, a “good” shelf, that one with grains and imported can goods, lots of soy sauce and olives have reappeared on the shelves, something I had noticed was getting scarce. I guess Sushi and Gran Martinis’s can still be made. On the right, about the only healthy looking area: That of fruits, vegetables and greens. Most of this stuff is produced locally and not subject to price controls, therefore you can find plenty of almost everything, another example of supply and demand and market forces at work. Of course, these products rose in price in triple digits in 2010 as reported by the Island Canuck Index earlier.
And just as I left and was paying (No Coke in cans, but that is another story), I was greeted by this happy sign at the cashier: “Two kilos of powdered milk per person”:
How there can be shortages of a product I despise, is difficult to comprehend.
The pretty revolution at work!
The Devil's Excrement 
February 13, 2011 at 11:10 pm
Political discussion aside, it is painful to see this happening to any country, anywhere.
I’ll be sharing this, if for no other reason than it is a warning to us in the US not to follow Venezuela down the road to The Planned Economy so desired by the present occupants of our Executive Branch.
February 13, 2011 at 9:55 pm
Liz:
And if I’m making my calculations right… fresh milk costs the same here as in the US! But we make Bolivares not Dollars -Big difference!!!
I’ll take your word on the cost. I am not touching exchange rates with a ten foot pole!
There is definitely a different fresh milk/powdered milk price ratio in Venezuela compared to the US.
A 20 quart, 4 pound container of powdered milk – skim as Syd points out- costs $15 in the US, which Wal-Mart labels as a rock-bottom price.
Venezuela
powdered milk Bs. 15/kg
fresh milk Bs. 7.5/lt
USA
powdered milk $8.30/ kilo ($15/ 4 lb.)
fresh milk 79 cents/ liter (75 cents /qt)
February 13, 2011 at 9:38 pm
Right wing or left, it doesn’t matter.
As CarlosElio wrote “Nothing dictated from above, not even the will of god, can do any good to humans.”
February 13, 2011 at 6:23 pm
Roger, We have military dictatorship telling Commies stories, so we have the worse of all worlds.
February 13, 2011 at 5:50 pm
Sad.
People should be telling those who have no cable, no Internet (i.e. 70% of Venezuela’s population) that that is NOT normal in the rest of Latin America, much less in Europe or Anglo-French America.
Liz,
Milk is something special in the Netherlands. For a business meeting, they ask you: “Do you want to drink milk, coffee or water?”
Not for nothing lactose intollerance affects just 1% of the Dutch.
February 13, 2011 at 4:57 pm
This not much different that the Bond issue we were talking about last week. Most foodstuffs are denominated in Dollars (Chicago Board of Trade) the world price on the open market. Even before it gets to Venezuela it has to be paid for in USD or some other accepted currency. Also, the commissions, which I will get to in a moment, have to be paid in the same real money. Once the food reaches Venezuela (our favorite country) several things happen. First, someone has decided to hold prices in Bs. steady even when global prices rise. This has to be made up by the Central Government or taken from the unsubsidized commercial markets. Second, since 70% of Venezuelans are poor, subsidies must be provided so that they don’t start to starve and thus revolt.
As much as I would like to blame this on Commies, the fact is that most of the Middle East and Africa is suffering the same problems and they are mostly right wing military dictatorships with a dash or more of Eight century religion. Food prices were on the bitch list in the recent events in Egypt you know. Most have no oil and its money and just a lot of sand not lush jungle and llanos that yes floods but is very productive when used properly as in Venezuela. Its the corruption stupid!
February 13, 2011 at 3:23 pm
Oh no, there will be plenty of inflation because the food component of the CPI is mostly imported. The Government knows shortages are worse than inflation, so it will have to allow price increases and give dollars. Inflation in January was the highest since April last year, o it’s already here.
February 13, 2011 at 2:42 pm
Syd, he comprado leche Klim en Texas y en Florida 🙂
Now that we are on the subject, the best powdered milk I have had is from Holland and/or New Zeland. Makro used to sell it, not anymore thou.
February 13, 2011 at 2:35 pm
Gringo and liz:
powdered milk in the US (and Canada) is skim milk powder. It looks and feels granular, as opposed to the softness of whole milk powder. Tastes way differently, too. It certainly is not the leche Klim of my memories, a taste which I don’t mind. I have seen a similar type of powdered milk, in bins, in natural health food stores. And I’ve seen whole powdered milk in cans, in several Chinese supermarkets.
February 13, 2011 at 1:59 pm
Gringo,
The prices here are :
powdered milk Bs. 15/kg
fresh milk Bs. 7.5/lt
A liter is a quart, isn’t it? (hard to make these equivalencies for me) and a kilo of powdered milk renders 7 to 8 lts. Which is around Bs 2/lt.
It’s cheaper the powdered one. And if I’m making my calculations right… fresh milk costs the same here as in the US! Butwe make Bolivares not Dollars -Big difference!!!
February 13, 2011 at 1:37 pm
Marxism, communism, socialism, they are all just masks for the strong to control the weak. By heavily controlling markets, you just create a pressure cooker. Sure you can keep things contained for a while, but they end up exploding if you don’t let nature takes its course.
Free markets are like an open fire. Sometimes they get too hot, but they self correct. Right now most commodities are at record highs compared to the other costs of production. This is a correction for labor getting too high. In the future, commodities will either come back into balance with other costs, or other costs will inflate to balance it out.
Places like Venezuela, Bolivia, Cuba, North Korea, Iran, and other oppressed societies will keep drinking the koolaid as long as they can keep the masses secluded.
“To each his own”, a wise man once said. In a market where there is no abundance, most everyone must look out for themselves first, the poor and the rich alike. Chavez is only different in that he pays lip service to the poor to make his millions. To win 2012, Venezuela needs a hero. Someone like Santos, who is primarily concerned with the country as a whole having more success. There will always be those at the bottom, but when there is more to go around the middle class get a much bigger share.
February 13, 2011 at 1:14 pm
Miguel,
Forty years ago, many developing countries had exchange rate regimes like Venezuela’s (overvaluation of the currency and rationing of imports). Sixty-five years ago, the UK had such a regime and many European countries did it after the First World War. But they almost all gave it up because they learned how destructive it was. If you did it long it enough, it caused total economic collapse. In the last 20 years, only a handful of countries have tried it, basically Iran, Zimbabwe, and Venezuela. It caused a spectacular blowout in Iran in the mid-1990s and they learned their lesson. Zimbabwe – nothing more needs to be said.
The underlying problem is that if you try to keep the prices of imports too low, by overvaluing your own currency, you make exporting less profitable. You are trying to indefinitely import more than you export. If you can’t borrow, you don’t have enough foreign exchange and you have to ration imports. So imports are cheap, but unavailable: That’s what you are seeing now in Venezuela. What is worse, the rationing, and inflation that results from the rationing, undermines export industries, reduces the availability of foreign exchange, and requires even tighter rationing. It is not a vicious cycle, so much as it is a downward spiral.
The source of import inflation is just changed. The Venezuelan devaluation six weeks ago will not cause inflation as you feared. That is irrelevant. What is causing inflation is the rationing.
Hugo is now milking PDVSA, his cash cow, too hard. Eventually, PDVSA will stop giving. But oil industries are hardy. Especially one like Venezuela’s at a time when oil prices are so high. If Venezuela were an agricultural or industrial exporter, it would happen quickly in a matter of months. Exports would collapse, the economy would die, and things would have to change. Most of Venezuela’s “non-traditional” exports have already collapsed. They only ones left are natural resource-based. But PDVSA’s slow death will continue slowly.
But when you worry about inflation, don’t worry about the legal exchange rate. That is only important if it is the rate at which you can BUY foreign exchange. Venezuela’s exchange rates are the ones at which you CAN’T BUY foreign exchange. What happens to the nominal exchange rate does not matter. What happens at CADVI does matter. If CADIVI makes more foreign exchange available, inflation will slow. If it makes less foreign exchange available, inflation will increase. And as PDVA becomes slowly weaker, the import ration will tend to decline. What Hugo must hope for is $200 oil. But even that only helps if Venezuela has oil to export.
February 13, 2011 at 12:41 pm
liz:
About the powdered milk: it’s what the poor buy, simply because it’s cheaper. I use it for cakes, the recipes call for it! They taste richer.
Powdered milk used to cost half of what fresh milk did in the US. Today, the cost is about the same, and at times one can find cases where fresh milk is cheaper than powdered milk, when fresh milk is used as a loss leader. Currently powdered milk costs 75 cents per quart. In the last two months, I have bought fresh milk at $2.17 /gallon (54 cents per quart) and $2.65/gallon (66 cents per quart).
February 13, 2011 at 12:21 pm
addendum: should be “high reliance on importing it, has been….”
February 13, 2011 at 12:18 pm
Supermarket shelves, indeed a good barometer of a society. As a student in what was Federal Germany, I was fortunate to go to the German Democratic Republic, as a part of a visiting student delegation for two weeks. I saw a lot of empty food shelves. On the other hand, in the fully stocked shelves, one could get hard bound copies of “Das Kapital” for the equivalent of a US dollar in state run book stores. Instead of eating cake, paper pulp would do.
While I don’t think we will reach the stage of having only petroleum to eat, the high cost of food, not to mention the increasing reliance on it has and will be an issue that one needs to consider as we approach the pre and post 2012 milestone.
Bon appetit!
“Zu erst das essen, dann die Moral”
Translation: Let’s eat first, then we can moralize.
February 13, 2011 at 11:09 am
Thanks Carlos for sharing. I think visiting Cuba is something every person should do, in order to abhor forever more any notion even remotely related with the left (that is if we are talking about moderately intelligent people).
To this day, it remains a puzzle to me how many people in Venezuela still considered themselves leftists, but then again, that’s why the country is fast approaching failed state status.
February 13, 2011 at 10:35 am
How can socialism survive unless there are enough poor people to need saving, or at least without people who ” feel” poor when they compare themselves to others?For social justice to be obtained(according to some) we have to level the the playing field by making everyone suffer.
Socialism needs poverty, envy and anger to sustain itself.
Without the excuse of helping the poor, and without the envy/anger of those with less, there is no political impulse for the re-distribution of wealth.
Shortages help sustain the feeling of poverty and it’s ultimate solution:the redistribution of wealth and the promises of revenge/salvation/and dependence on the State.
It is essential than in order for the left to survive politically that the people remain lacking.
February 13, 2011 at 3:42 am
OK, since others are doing it, I’ll reminisce about Cuba. As a kid in Havana in 1959 I used to go frequently to listen to Fidel Castro at the many mass gatherings taking place at the time. I was a 10 year old, and usually made it to the front, to within a few feet of the greart man. Hero worship didn’t last long, though. It wasn’t the empty shelves that turned me around (I didn’t particularly like to eat at the time). It was the arrogant and intolerant behavior of Castro’s followers that put me off.
It is not so much that communism can’t fill supermarket shelves (although that is bad enough). The worst part is that communism can’t tolerate alternative social or political views. This is because communists fear they might lose in a fair election. As a consequence of this, shelves will remain empty because communism doesn’t work. If there is political alternability at least the shelves will fill up from time to time.
Cynics argue thet communists turn a disadvantage (empty shelves) into an advantage (control of the people through controlled hunger, not to mention a controlled supply of sanitary napkins).
The Chinese will put stuff on the shelves, at a price.
February 13, 2011 at 1:51 am
Maria, what can I tell you? Columbus is a neat town, OSU is a great institution and the Buckeyes is definitely a better team than the Wolverines. Trained in decision theory, I must be honest evaluating the odds. But that honesty leads me to the firm belief that Ann Arbor is the better town. I like Okemos too, although I don’t like Michigan State as much. Hope you are not a Spartan fan.
Roy, thank you for your comment on my Cuba story. It is true. I have half a dozen depressing stories from that trip. Nothing dictated from above, not even the will of god, can do any good to humans. Society is a complex system and the different layers of it need autonomy to do what needs to be done. In communism the different layers MUST do what the supreme leader says that needs to be done. That’s why they always end up with empty shelves in supermarkets.
February 12, 2011 at 8:30 pm
CarlosElio,
I loved your Cuba story. Thanks for sharing it!
February 12, 2011 at 8:29 pm
I have noticed that supermarkets have a trick for making themselves look better stocked than the really are. They will not only spread out the merchandise they have, but they will bring it all to the front of the shelves, so that the products displayed are actually only one or two units deep. A truly stocked supermarket shelf is full all the way to the back of the shelves, and there is even more in the back of the store, so they can stock the shelves full every day.
In this way they try to hide the fact that they might have only a very small fraction of their normal stock on hand.
February 12, 2011 at 6:52 pm
If those are anything like the groceries one would see in San Juan de los Morros, then I can tell you, first come the empty shelves then comes the Chinese. The Chinese take over and stock the shelves and run a very tight ship. This appears to be one answer the robolution has for groceries with empty shelves.
February 12, 2011 at 5:29 pm
CarlosElio Says:
Blasphemy! Graduated from Ohio State but presently living in Okemos.
February 12, 2011 at 4:53 pm
Yes, Maria, it is Ann Arbor. Now we have almost a couple feet of snow on the ground. It may be numbingly cold for a Latin guy, but the warmth of its people and places compensates. I surmise you also have an Ann Arbor experience. What years?
I have heard the great buffoon tell that story. “Now Venezuelans eat more” I imagine he is talking about his friends and family members, in which case, he is telling the truth.
February 12, 2011 at 4:15 pm
“You touched on something that runs very deep in my personal history.
When I was working on my PhD here in Michigan, Ronald Reagan was waging an illegal war against Nicaragua. Violating US and international law, the great communicator was mining ports, arming the Iranian Mullahs, and pretty looking secretaries were absconding documents in their underwear. The Soviets had giving the Nicas a few choppers but they were not being deployed efficiently along the border with Honduras, then the CIA’s Peshawar of Central America. ”
Ann Arbor, right?
By the way, the scarcity of products was recently explained, by the orate himself, as being the result of Venezuelans eating more, and I guess, menstruating more.
February 12, 2011 at 2:50 pm
Miguel, last Thursday I went to 6 or 7 different places to buy groceries (all in one morning!). Believe me, this is getting worse by the hour.
About the powdered milk: it’s what the poor buy, simply because it’s cheaper. I use it for cakes, the recipes call for it! They taste richer.
On the fruits and vegetables I disagree a bit with you. I cannot find always what I want… The people in this household are used to a semi-gourmet diet and they complain if I just cook ‘bistec, arroz y platano’. And of course, to be a vegan in this country is for the rich. You can find cheaper cuts of meat than certain veggies… And the greens look always withered.
I don’t drink Coke but, it’s also hard to find other brands. And when you do is the ‘light’ version, which I despise.
Gracias por todo Fidel!
February 12, 2011 at 2:41 pm
Don’t worry the powdered milk limit will be increased from 2 to 1.8 next week by Big Brother.
Actually this is a pretty depressing post. This is the kind of post that anyone on Earth can look at and understand right off hand. You didn’t even mention prices but I can imagine what those do in a shortage.
The weather has hit the US (even Northern Mexico got a freeze) pretty hard and we may very well be facing shortages of fruits and veggies in the coming months. I don’t think the Mexicans are going to like seeing the little food thats left get trucked north to higher paying customers, but thats another story.
Awesome post. I will definitely share.
February 12, 2011 at 2:02 pm
You touched on something that runs very deep in my personal history.
When I was working on my PhD here in Michigan, Ronald Reagan was waging an illegal war against Nicaragua. Violating US and international law, the great communicator was mining ports, arming the Iranian Mullahs, and pretty looking secretaries were absconding documents in their underwear. The Soviets had giving the Nicas a few choppers but they were not being deployed efficiently along the border with Honduras, then the CIA’s Peshawar of Central America. I worked on a cute algorithm that minimized response time in a dynamic fashion while optimizing maintenance and security requirements according to several scenarios.
When I finished my PhD, I went to Cuba with my wife. I had a few contacts in the island. A young Andres Caleca, friend of mine during my teen years in Los Teques and future honcho of the electoral authority, was the representative of the MEP youth in the island. I got an appointment with higher ups in PCC.
Then we visited the Mathematics department of the University of Havana. I wanted to check my algorithms with Cuban math minds. A middle-aged professor listened to my idea. I began to draw formulas and imaginary landscapes on a piece of paper, but the guy was looking at me, not my notes. He invited me to go outside and under the canopy of a beautiful tree he fires his question. Have you been to a supermarket here in Cuba? I had, I told him. What have you seen in those shelves? Then the image of empty shelves, or shelves stuffed with 3-gallon cans of Hungarian lard from end to end and nothing else came to my mind. I told him the desolate view I had seen.
“I am a mathematician,” he said. “Marxism pretends to be an economic theory,and whatever economic theory you talk about mush show its fruits in the shelves of a supermarket. Anything else is bullshit. For a product to make it to the shelve, it must be produced first, which requires factories and workers, and raw materials. Then it must be packaged, distributed, sold and restocked. All those activities are the result of multiple agents, each one of them working in a very narrow field all of which need to be connected for the harmony of the market to meet people’s needs. It is a hugely complicated enterprise with multiple decision points. The only way it can work if each decision point has its own intelligence and its own motive to do what needs to be done with the input it receives from one channel to create a desirable input for the channel downstream, otherwise instead of a symphony you get noise in the market score. The essence of communism is the denial of decision autonomy and personal motives to the multiple layers of the market. That’s why you see empty shelves. And you want to use your algorithms to make sure that the shelves in Nicaragua are also empty.”
It is not a verbatim rendition of that conversation, but it was pretty much along those lines. I offered a mild rebuttal, but the evidence was overwhelmingly on his favor. During the rest of my trip, I found more evidence that the guy was right, that communism was a colossal failure no matter how you wanted to see it. I cancelled my appointment with the PCC guys and left the island and my silly socialist idealism right there.
February 12, 2011 at 1:47 pm
My wife’s “valentine” will be 2 packs of sanitary pads that i bought abroad.
February 12, 2011 at 1:41 pm
In Margarita we have it even worse due to transportation problems.
Cooking oil, margarine, flour, tea, milk, mayonesa, etc., etc are hidden or non existent
February 12, 2011 at 1:29 pm
Maybe now it looks even worse, but this was already depressing like 3 years ago, before I leave the country.
The disappearing of brands and/or its incapacity to get distributed in all the country is a sign, and it is not a good sign.