Friday, February 21, 2014

The real crisis in Venezuela lies ahead

In spite of all the excitement I have had to pry myself away from the key board except for a couple of Twitter checks. See, I had a busy day at work today because things are getting real iffy, back in the real world where people are starting to plan about closing their business for lack of supplies. That is right, I work in supplies for food producers and we are running low, dramatically low in the supplies we need.

I cannot speak for Polar of course, but in my little word linked to agribusiness my conversations and activities this day were as follow:

-Check out inventory to see what and how much we can still produce. Based on 2013 production by late March about a third is not going to be possible anymore, by late April early May we are below 50% and by June we seriously must consider closing shop.

- This is not idle or willingly: providers simply are not selling anything, at any price. Either they are out of stock or they have barely enough for their own needs. The tale is ALWAYS the same: "they have not approved any currency for importation since X (a month in the second half of 2013)".

- But when I wrote deadlines above I forgot to mention that these are based on rationing: that is I have to start selecting the clients that I will help and those that I cannot help.  Client A buys me 100, I will provide this one 70. Client B is irregular and only buys 10. That one is out. Unfair? Certainly, but I have no choice. I need to help A to survive because my own chances of survival improve if A survives. Besides A having the same problems than I do is willing to wait for me to bill later, when I have an idea of what the prices of raw material will be. That is right, there is no more financial planning, just some type of barter where I send client A X kilos of product Z in a price range that will be between N and M price.  This of course is not very kosher and we could both get in trouble with the government that controls any shipment of stuff related to food. So we will make bogus bills that we will annul at some point, or overcharge alter or who knows what. But we must take that risk otherwise we will both go down.

- And yet this is not enough. I have started altering some formulas on some of my products according with the customer. See, if a product has 10 ingredients and I am almost out of #7 then we must reduce the dose of #7 to try to produce a little bit more. Of course I can do that because I do not deal with human consumption products and because the client is willing to assume the risk. After all in some cases a defective product is less damaging than no product at all.

I do not want to give specific detail of course as I do not want to compromise anyone, nor my coworkers or my clients. But that is my daily life now, and I am simplifying a lot, not entering in other aspects where similar or worse problems exist.

The fact of the matter is that if the regime does not start allowing entry for supplies to manufacture food within weeks the situation may become unmanageable.  Between direct importations and raw materials Venezuela already import the equivalent of 60% of its food. I am absolutely certain examining the past record of the regime that they are absolutely unable to import, pay for and distribute efficiently food for 100% of the population. Heck, they already do a lousy job for what is about the 30% they are supposed to distribute themselves...

So, why the regime is persecuting the activists of Voluntad Popular all across the country today, the shelves keep emptying and the real crisis is on its way. Today already I learned from eye witness of two threats at looting a food store by people upset standing in line as what they stood in line for run out....


  1. Anonymous7:26 PM

    Daniel, thank you so much for all that you do! Although not related to this post. please view the following link.... notice the brass knuckles at very end....

  2. Boludo Tejano8:43 PM

    Which indicates that the pot of discontent will keep simmering. Recall that what set off Tachira's student protests was a sexual assault on a student coupled with the government's inept response. It ain't just the "three strikes and you're out" checklist of yesteryear. The failures are many and systemic.

    Thanks for your reporting.

  3. Anonymous10:09 PM

    Very sad, I have heard of cases no no AAD (permits to impot and apply later for Cadivi dollars) approved since mid October until now, and only a trickle...

  4. Anonymous10:11 PM



  5. Government is wholly unable to run an economy. In a sane environment companies will imports, buy and sell and transport without government control or interference.

  6. Anonymous10:21 PM

    maduro small "m" is desperate , don't relent Now ! the momentum is in your favor, just now asked USA to exchange ambassadors. that won't happen !

  7. Anonymous10:38 PM

    Wonder if the govt is starting to tear itself apart with Maduro asking for talks with the great enemy (USA). As an American I don't see it happening. Maduro and Chavez cried wolf way too many times and the people in our State Department are true professionals and know how to play this game. The Venezuelan people need to keep protesting!!!!


    1. Anonymous10:42 PM

      Hear that ! as an American as well. Keep the faith

    2. Anonymous10:46 PM just now released


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