May 18 (Bloomberg) -- Encarnacion Rivas, an 89-year-old Venezuelan retiree, had to traipse around a half-dozen stores in Caracas on her search for toilet paper as dollar shortages in South America’s biggest oil producer reduce supplies of imported goods.
“This is the first time I’ve ever experienced this,” she said while standing outside a supermarket, listing other products she has struggled to find such as cooking oil, toothpaste and instant cereal. “I blame the government, which has taken everything from private companies and is now struggling to bring things in.”
President Nicolas Maduro this week met with the country’s largest privately-held food producer in a bid to tackle shortages as price controls stifle local output. He also promised to reactivate dollar auctions after a pre-election spending spree drained the country of greenbacks.
Commerce Minister Alejandro Fleming said monthly demand for toilet paper is about 125 million rolls and that the government will supply 50 million rolls to “saturate the market.”
“There’s no deficiency in production but rather an excessive demand which has generated nervous purchases in the population as a result of a media campaign,” Fleming said May 14, according to state news agency Agencia Venezolana de Noticias.
Yet it’s not just toilet paper. The central bank’s scarcity index, which measures the amount of goods that are out of stock on the market, rose to 21.3 percent last month, the highest since it started tracking the measure in April 2009. That’s having an impact on inflation, which rose at the fastest pace in three years last month. Consumer prices climbed 4.3 percent from the month earlier.
The government raised price caps this week on beef, chicken, milk and cheese by 20 percent to encourage domestic output after producers said they can’t turn a profit following a 32 percent devaluation of the bolivar in February.
Rogelio Gaona, a 68-year-old retired medical equipment salesman, agreed with the government that hoarding by nervous consumers is causing the shortages. While chicken, meat and corn flour are in short supply, he said talk about shortages is overblown and products can be found if shoppers go to state-run supermarkets.
“What happens is people are buying too much,” he said. “If a product is scarce you have to find the alternative.”
The government devalued the currency to 6.3 bolivars per dollar from 4.3 bolivars following a spending spree that helped former President Hugo Chavez win a third six-year term before he died of cancer in March. The fiscal deficit tripled to 11 percent of gross domestic product as a result, according to Moody’s Investors Service.
Chavez’s successor Maduro this week blamed the private sector for exacerbating shortages of products including chicken, beef and sugar. He spoke with Lorenzo Mendoza, owner of Empresas Polar SA, in a meeting the businessman called “cordial” after the self-described socialist said the food producer had cut output of everything from rice to corn flour.
Solange Diaz said she spent two days trying to find glycerin soap for her sister’s dermatological condition.
Diaz, 72, who was visiting Caracas from Margarita island, said she’s also struggled to find rice and cooking oil. People in her hometown, which is a popular vacation destination in Venezuela, flock to supermarkets when delivery trucks arrive to see which products are available.
“If you think it’s bad here you should go to Margarita -- it’s chaos,” she said.
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