[progchat_action] Food crisis growing for Chavez
 
Date: Tue, 1 Jan 2008 23:20:18 -0600 (CST)

http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20071223/BUSINESS/712230303/1003

HOME > Business

Food crisis growing for Chavez Eases price controls on
many basics

By FABIOLA SANCHEZ, Associated Press Writer

CARACAS, Venezuela -- President Hugo Chavez's government plans to
loosen price controls on some basic foods to help stem shortages of
items like milk and cooking oil, the finance minister said.

Less than 40 percent of consumer demand is being met for at least 10
basic food items as Venezuelans struggle with shortages that have been
partly blamed on price controls, Finance Minister Rodrigo Cabezas told
the Associated Press.

The government already lifted price controls on some types of milk
earlier this month. Finding milk has become especially difficult for
Venezuelans, and Cabezas said the government estimates the meager
supply of milk is meeting only 10 percent of consumer demand.

Chavez imposed price controls in 2003 in a bid to keep a cap on
inflation, but prices continue to rise amid a briskly growing economy
and heavy government spending bankrolled by soaring oil profits.

Inflation surged to 4.4 percent last month alone, sending annual
inflation in the past 12 months to 18.6 percent.

Many foods covered by the price controls -- sugar, cooking oil, milk,
black beans, eggs and fresh chicken -- are hard to find in
supermarkets, and Chavez's critics warn shortages are likely to persist
as long as the controls are maintained.

Economists say milk is also especially scarce because of a lack of
production within Venezuela and an international shortage of milk to
import.

Cabezas said price controls on milk, sugar and cooking oil would be
adjusted to deal with the scarcity of some products "in the short
term," but stressed that controls will not be lifted completely.

Government officials accuse producers of hoarding basic goods to try to
sell them at inflated prices for a larger profit. Some food producers
and importers counter that selling products subject to price controls
is no longer profitable.
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