(Bloomberg) – Venezuela, a country experiencing what is considered the worst humanitarian crisis in the Western Hemisphere, is now facing a torment of another magnitude: Caracas food markets are turning into ghost towns.
In Guaicaipuro, near the city center, the long aisles of stalls stretch endlessly, with almost no shoppers in sight. In Quinta Crespo, food vendors desperately call for attention, yelling every time someone walks by. In the San Martín market, to the west of the city, some stalls are closed, while others have so little food that they could well have closed. Some have good supplies, but the prices are so high that prospective customers would just walk by. There is so little activity that some street vendors don’t even flinch, they just sit around playing on their phones, with no expectation for the day.
Although it appears that Venezuela’s economy may have finally bottomed out, signs of recovery are beginning to show after decades of a growing gap between rich and poor that leaves millions in the country in extreme vulnerability. The empty markets of Caracas are one of the striking examples of this gap, due to increasingly reduced access to fresh and affordable food.
There are many causes behind the rampant inflation in food prices in the country, but the most serious problem now is the fuel shortage that has intensified the problems.
In Venezuela, the country with the largest oil reserves, the fuel shortage is so acute that it has paralyzed the economy, forcing factories to close and people to queue for hours to fill their tanks. The tightening of US sanctions suffocated supplies coming in from abroad, and now the lack of diesel affects almost every aspect of the food supply chain.
Farmers do not have enough fuel to use the machinery they need to plant and care for crops. What little is grown in the western Andean region, the heart of production, has to be trucked 12 hours or more to the capital. Fuel is so expensive that transportation costs alone raise the price of vegetables by 200%, said Gerson Pabón, director of Fedeagro, a large association of food producers.
By the time shipments of spinach or potatoes reach stalls like Roberto Fernández’s in the Quinta Crespo market, the prices are so high that his customers can barely afford to eat.
“People used to buy by the kilo. Now, they only carry two, three products, ”Fernández said, adding that their sales have been cut in half this year. “The drop in consumption is disguising the shortage.”
One more burden that adds up is the ad hoc dollarization of the local economy. While it has nominally helped keep inflation under control, it is of little relief to the country’s poorest, who mainly have access to the bolivar, which has continued its huge downward spiral.
The country’s Ministry of Petroleum and Food Ministry did not respond to requests for comment sent through the Ministry for Communication and Information.
A kilo of tomatoes can cost US $ 1.50; potatoes and carrots are about the same, while peppers can cost almost $ 2. It’s an extremely high cost considering that the average worker earns about $ 55.50 a month, according to a February report by local analytics firm Anova, sponsored by the Inter-American Development Bank. Meanwhile, retirees, common customers of municipal food markets, receive a monthly pension equivalent to less than US $ 3.
Seven years of economic collapse have led Venezuela down a sad path of dysfunction and disorder. Hunger is so ubiquitous in this once-rich nation that the country has been on the brink of full-blown famine, the United Nations World Food Program warned. The fallout from Covid-19 has likely pushed the problem well beyond 2019 levels, when around 9.3 million Venezuelans didn’t have enough to eat, according to the group.
Until now, Caracas was often protected from the worst of the crisis. The capital’s markets were like little islands of relief, supplying the poor and working class with fresh produce, meat and dairy. Now that last sanctuary is disappearing amid spiraling food inflation.
Recently, Marisol Méndez spent a Wednesday morning in the San Martín market looking for vegetables. With the dollarization of the economy during the past year, his salary, a combination of dollars and bolivars, reaches him less and less in the market where he has bought for 28 years. I used to buy 2 kilos of tomatoes and potatoes at a time. Now, hopefully he comes home with a pound. That day, he left empty-handed.
“I practically stopped eating meat, deli, and dairy. I buy a lot less vegetables. Vegetables are expensive here, ”said Méndez, 60, a manager of a food distribution company that supplies some of the market stalls.
Instead of fresh food, many Caracas people eat a mixture of carbohydrates and processed foods to avoid hunger.
“The Venezuelan diet is very monotonous,” said Marianella Herrera, nutritionist and professor at the Center for Development Studies of the Central University.
“We are creating a breeding ground for chronic diseases such as diabetes, heart disease, poverty-related obesity and food insecurity, even some types of cancer.”
Of course, the picture is different for the wealthy, who often earn in dollars or receive remittances from relatives abroad. The wealthiest and most connected in town can go to big box grocery stores where the shelves are full, and they also find ways to fill their tanks.
But for the poor, food inflation hits hard. In the month of May alone, the cost of food rose 22%, while the prices of fruits and vegetables increased 31%, according to the Caracas Cenda research group. However, even that level of price acceleration is lower than what has been seen in the past. A year earlier, food costs had risen almost 30%, while in May 2018 they were 84% up from the previous month.
In a recent interview, Tareck El Aissami, Venezuela’s oil minister, said that lines at gas stations will disappear when the country’s crude production quadruples by the end of the year. But that view is so optimistic that it tests all credulity, especially as the country faces some of the toughest economic sanctions ever imposed.
The diesel shortage means that food production in the Andean region has fallen 85% this year, according to Fedeagro’s Pabón. Trucks that haul what is typically produced are forced to pay for fuel on the black market, where they typically pay $ 3 a liter ($ 11 a gallon). This cost increases even more if the account is taken out in bolivars.
“Suppliers in the wholesale market say they pay for diesel in US dollars, so they charge us in dollars,” said Luisa Hidalgo, 68, who runs a food stand in the San Martín market. Its products have been reduced and now it sells mainly bananas and sweet pepper. But it could be worse.
“We don’t get a lot of dollars in this part of the city,” he said. “That’s why my neighbor closed. It could not be resupplied ”.
Original Note: Food Markets in Caracas Empty Out as Inflation Hits the Poorest
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