Guardian UK: Venezuela's coffee industry in chaos as price of beans double

[Psephos]

Tuesday January 10, 2006
The Guardian

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.

<snip>

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.

<snip>

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.

<end of excerpt>

http://www.guardian.co.uk/venezuela/story/0,12716,1683002,00.html

[SoCalDem]

1. Sounds like Hugo needs to start putting farmers back on farms

and start producing locally...

[Flabbergasted]

2. Or an economics course

[oblivious]

3. This sounds so weird. But producers must have been making a bundle.

When the price of the beans doubles and they are still able to make a slim profit, their profit must have been pretty good. It would be nice to have a rough cost breakdown: beans, roasting, grinding, sales and transport.