VENEZUELA / Ya comenzó la cosa…

Coffee industry in chaos

· Shortages in shops after producers hoard stocks
· National Guard told to find every last kilogram

Greg Morsbach Guardian

CARACAS - An attempt by Venezuela's leftwing president, Hugo Chávez, to double the price that coffee producers pay farmers for a sack of beans has led to empty shelves in supermarkets throughout the country and fears of shortages of other basic foodstuffs.
President Chávez, who maintains price controls on basic foodstuffs, raised the price of coffee beans by 100% last month after weeks of protests by coffee farmers.

But most of the country's coffee producers, who buy, roast and grind the beans, refused to sell on the coffee yesterday, claiming their margins had been cut, and began hoarding thousands of sacks of unprocessed beans.

Eduardo Bianco, a representative of the country's coffee producers, said: "The government can't expect us to sell our coffee if it is refusing to increase the prices for a kilo of coffee you buy over the counter in the shops."

As coffee disappeared first from the supermarkets and then from the streets, the National Guard was sent out to confiscate coffee that had been stockpiled at private warehouses.

Two warehouses were raided, and dozens more are on government lists.

Mr Chávez said he would not tolerate the situation. "I've instructed the National Guard to look for the missing coffee and to find every single kilogram of it," he said in his weekly TV and radio show, Hello Mr President. "The army has the permission to seize the coffee with the power of attorneys and judges. We will sell the coffee at prices set by us."

Some supermarkets in the capital, Caracas, said they had also run out of sugar, chicken, powdered milk and maize. Store managers said they were not being supplied with new stock from wholesalers and producers, who were complaining that their profit margins were too low. Frustrated customers were told that coffee, milk and sugar suppliers were sitting on their goods until the government raised retail prices.

"I'm really fed up," said Clara Fuentes, 25, a mother of two small children. "I have spent the last three hours trying to find a shop that sells coffee and sugar. After visiting six supermarkets, I have given up."

Some owners of street cafes in Caracas said they would run out of coffee within days if the government and coffee producers did not reach an agreement. Venezuelans love their morning cup of coffee and there was growing unease among office workers yesterday that their daily shot of espresso or cappuccino might soon be unavailable.

"I come here every day on the way to work," said Julio Vivas, who works in a bank. "The way things are going with the milk, sugar and coffee shortages, it's only a matter of time before we can say goodbye to our milk coffee with sugar."

The increase in the price of raw coffee beans was initially applauded by impoverished farmers. But the government did not raise the price at which retailers sell processed coffee to the shops. Coffee processing companies are now being forced to sell coffee for a slim profit or at a loss.

In response, President Chávez has said that he might be forced to nationalise the coffee industry.