- Title: In hungry Venezuela, food producers step up exports to survive
- Date: 23rd October 2019
- Summary: MARACAIBO, VENEZUELA (AUGUST 1, 2019) (REUTERS) SHRIMPS ON A CONVEYOR MACHINE VARIOUS OF A WORKER SEPARATING SHRIMPS VARIOUS OF A WORKER ORGANIZING SHRIMPS TRAYS VARIOUS OF SHRIMPS TRAYS ON A CONVEYOR MACHINE (SOUNDBITE) (Spanish) HEAD OF VENEZUELAN SHRIMP INDUSTRY ASSOCIATION, FERNANDO VILLAMIZAR, SAYING: "If we don't export it is impossible to survive. It is a call on your conscience, we should go hand and hand, very closely hand and hand with state institutions and our industries. Alone or individually, it would be very difficult to be successful." VARIOUS OF WORKERS SEPARATING SHRIMPS VARIOUS OF SHRIMPS ON A CONVEYOR MACHINE
- Embargoed: 6th November 2019 12:16
- Keywords: Venezuela exports crisis economy
- Location: MARACAIBO AND CARACAS AND SAN FELIPE, VENEZUELA
- City: MARACAIBO AND CARACAS AND SAN FELIPE, VENEZUELA
- Country: Venezuela
- Topics: Government/Politics,International Trade,Editors' Choice
- Reuters ID: LVA001B2BJXON
- Aspect Ratio: 16:9
- Story Text: Shrimp farming is booming in this western Venezuelan city, but little of the shellfish is destined for tables in this malnourished nation.
About 90% of this shrimp is headed for Europe and Asia - with the blessing of President Nicolas Maduro.
Venezuela's leader has lauded food exports on television as a way to raise hard currency to stabilize an economy in crisis. And he is paving the way for more foreign sales. His administration has loosened restrictions to allow more production to go abroad, 10 food industry entrepreneurs and executives told Reuters.
In addition to seafood, Venezuelan cheese, avocados, citrus, breakfast cereal and candy are finding international buyers.
These new foreign sales are tiny, with most companies billing less than $1 million per year. Venezuela remains almost entirely dependent on oil exports, which amounted to $29 billion last year.
Still, the numbers signal a shift for a government that has long blamed the private sector for shortages of basic goods. Maduro and his predecessor, Hugo Chavez, for years accused food companies of hoarding and profiteering. Business leaders say empty shelves were the result of state policies such as price and currency controls and the nationalization of farms and factories.
Since 2017, 140 Venezuelan businesses have begun exporting for the first time, half of them selling food products, according to data provided by Scottsdale, Arizona-based advisory firm Import Genius, which collects customs data for the import-export industry.
Some veteran exporters, meanwhile, are leaning more heavily than ever on foreign sales as Venezuela's currency has collapsed. Fernando Villamizar, the head of a Venezuelan shrimp industry association, said the withering of consumer spending power at home has forced producers to look abroad for growth.
On a recent morning at a facility owned by a member of the trade group, dozens of workers in baggy smocks, plastic gloves and face masks cleaned shellfish and put them in boxes to be frozen. An order that day was bound for France. The plant also ships to Spain and Vietnam.
"If we don't export it is impossible to survive," Villamizar said.
Venezuelan companies sold $81 million worth of shrimp abroad last year, up from $54 million in 2016, making it the country's 4th-largest non-oil export, according to figures from the Venezuelan Association of Exporters.
Maduro's enthusiasm for non-oil exports comes as U.S. sanctions have hurt Venezuela's petroleum sales. To earn hard currency, his government is scrambling for alternatives.
In July, Maduro toured a factory outside Caracas that ships chocolate to Japan, television cameras in tow. He said the goal of these and other exports was to generate "euros, rubles, yuan and cryptocurrencies."
Food producers looking to export need to obtain a variety of government permits. Under Chavez, the state frequently denied those permissions, delayed them or never acted on them, the food industry entrepreneurs and executives told Reuters. They said Maduro's administration is now granting more permits, allowing them room to manoeuvre.
The Information Ministry did not respond to requests for comment on Maduro's exports strategy.
The government this year has also largely given up controlling prices, three of the food industry executives said. More goods have returned to Venezuelan stores.
But even with more products available, Venezuela's hyperinflation means few can afford to buy. Compared to five years ago, the daily calories now consumed by the average citizen have fallen 56% to 1,600 calories, according to Caracas-based Citizenry in Action, a nutrition-focused nonprofit. That is well below the 2,000 to 2,500 calories per day recommended by the World Health Organization. Millions depend on government food handouts and subsidized staples.
Lack of demand has spurred two large Venezuelan food companies - Empresas Polar and rival General de Alimentos Nisa CA, or Genica - to export products that until now had only been sold in Venezuela, said two people involved in those operations and a third with knowledge of them.
The two companies last year exported a combined $59,000 worth of merchandise, mainly to Argentina and Chile. Among the items headed abroad was a once-popular melted cheese spread made by Polar.
Genica told Reuters it was entering new markets, but would not elaborate. Polar did not respond to requests for comment.
The Venezuelan unit of another major firm, Nestle SA, as of June had exported 18 tonnes of instant cereal worth $18,600 to the United States, according to port records.
Convenience foods are now beyond the reach of Venezuelan shoppers such as Caracas resident Morela Vazquez.
"The costs have increased a lot. I don't know what happened here," she said.
Nestle said in a statement that its exports generate foreign exchange it needs to acquire raw materials, and that these sales comply with Venezuelan law.
Such sales do not violate U.S. sanctions, which forbid American firms from doing business with Venezuela's government or state-run companies such as oil giant Petroleos de Venezuela SA. Venezuela's private sector companies are free to sell to U.S. buyers.
Attorney Daniel Sanchez opened a fish farm in central Venezuela three years ago to raise tilapia, which is largely unknown in Venezuela. He has buyers in Colombia and is eyeing the United States.
Showing off outdoor tanks teaming with fish, Sanchez said he sells tilapia for $2 a kilogram. That's the equivalent of more than a week's pay for Venezuelans earning the minimum wage.
"For a lot of characteristics is a product (tilapia fish) to export," Sanchez said.
The idea is to produce for export," Sanchez said.
Exports by Venezuela's private sector companies increased by 26% in the first quarter of 2019 versus the same period a year ago, even as the economy contracted by 27%, according to the most recent central bank statistics.
Despite Maduro's public praise of exporters and loosening of export restrictions, the people interviewed by Reuters say his government still doesn't make it easy.
They said needed permits still can be inexplicably denied from one month to the next, while the export of staples such as corn flour and rice remain prohibited.
Businesses say cash-strapped city and state governments have hiked taxes aimed at exporters, while state-run ports have raised fees.
Local officials in Maracaibo, Venezuela's second-largest city, have targeted exporters for bribes, according to three people who told Reuters they have been asked for such payments.
State port agency Bolipuertos did not respond to a request for comment. The city of Maracaibo and the state of Zulia, where Maracaibo is located, did not answer emails seeking comment.
(Production: Carlos Carrillo, Efrain Otero, Alberto Fajardo, Johnny Carvajal)
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