April 6, 2010

Venezuela increases dairy prices after currency devaluation

Venezuela raised government-set price caps on milk and dairy products as much as 30% yesterday (Apr 5) in an attempt to boost producers' profits and head off shortages of basic goods.

Pasteurised milk prices jumped 30% and gouda cheese prices rose by 23%, according to reports. The costs of powdered milk and white cheeses were also raised.

Venezuela, a net food importer, has seen shortages of basic goods worsen since President Hugo Chavez devalued the bolivar by as much as 50% this year in an effort 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 climbed 1.5% in February from a month earlier, are likely to rise faster with higher food prices, according to a forecast  report.