MercoPress. South Atlantic News Agency

Chavez hikes basic food prices, including milk, 30% on average

President Hugo Chavez wants less obese Venezuelans

Venezuela raised this week government-set price caps on milk and dairy products as much as 30% in an attempt to boost benefits for producers and head off shortages of basic goods.

Pasteurized milk prices were raised 30% to 4.15 bolivares ($0.97) per 900 milliliter container and Gouda cheese prices were hiked 23% to 36.87 bolivares per kilo, according to a resolution published in the Official Gazette. The costs of powdered milk and white cheeses were also raised.

Venezuela, the largest oil producer in South America and a net food importer, has seen shortages of basic goods including sugar worsen since President Hugo Chavez devalued the Bolivar by as much as 50% this year in an attempt to stimulate production and exports.

The government, which controls the prices of more than 100 basic food goods, raised price caps for sugar, rice and chicken last month by as much as 35%. Consumer prices, which rose 1.5% in February from a month earlier, are likely to rise a faster 2.9% in March after the food price increases.

Inflation in Venezuela is the highest in Latinamerica having reached 25.1% last year. Economists are predicting the tendency could worsen in coming months.