MercoPress. South Atlantic News Agency

Venezuela: price rises of up to 50% for 15 basic foods

Venezuela raised regulated prices of 15 basic foods ranging from bread to beef by up to 50% and removed price controls from other goods in an attempt to ease sporadic shortages in supermarkets.

The move generated fears of an upward surge in already high inflation in Venezuela, where President Hugo Chavez has been trying to impose a strange blend of autocratic socialism under the pompous denomination of "Bolivarian revolution". Eduardo Saman, president of the state-run Institute for the Defense of People's Access to Goods and Services, said the price adjustments would have a minimal effect on inflation. He argued it may even help keep prices down by encouraging vendors to heed price controls instead of selling goods "at whatever price". However the prevailing opinion is that price adjustments may help to cut shortages, but inflation will "continue to rise". Annual inflation in metropolitan Caracas reached 33.7% in the twelve months to July. The government said that foods in high demand, such as prime cuts of beef, went up 50% to 8 US dollars per kilo; pasta 23% to US$1.57 per kilo; bread increased 49% reaching US$2.06 per kilo. The government removed price controls for items including oatmeal, salt, and special pork cuts. Since 2003 the administration of President Chavez has imposed price controls on many basic foodstuffs to combat inflation, which has also forced producers to pursue other lines of profitable work causing sporadic shortages. The Central Bank said last week that in July, 12% of the products that make up the basic food basket, which is used to measure inflation, had experienced shortages. Alberto Cudemus, president of the Venezuelan Pork Federation, applauded the price adjustments, which he called "very important". Cudemus told Venezuela's Union Radio that the new prices for pork will guarantee that production will be profitable. But Tomas Ramos, president of the Venezuelan Bread Industry Federation, said that bread still cannot be produced profitably even at the new prices. He added, though, that bakers hoped to keep the market supplied.