Sun, Jan 08, 2006 - Page 11 News List

Coffee crisis brews in Venezuela over state's price limits


Venezuelan President Hugo Chavez threatened on Friday to nationalize the country's coffee producers -- who process the raw beans to make them ready to brew -- if they refuse to sell their product at government-controlled prices.

Producers "are hoarding coffee, waiting for me to raise the official price, but I won't raise it," said Chavez, speaking to pro-government lawmakers. "If they don't want to roast the coffee in the roasting facilities they have, we will take the roasters ... we will nationalize them."

Coffee is vanishing from store shelves across this South American country as producers protest the strict state-imposed price limits, arguing the official prices are below their costs.

Chavez decreed price controls on coffee in 2003 to counter inflation and protect the poor. But prices set in early December outraged coffee producers, prompting protests in downtown Caracas and paralyzing deliveries.

Chavez, a socialist and self-styled "revolutionary," urged National Guard troops to seized any coffee being hoarded by wholesalers. Coffee seized by authorities will be placed on the market, including at state-subsidized supermarkets, despite objections by producers.

Troops have already seized 30 metric tonnes of coffee.

Gaetano Minuta, director of a coffee producers union in western Merida state, said that government seizures would only increase shortages.

"The raids are going to prompt the industry to buy fewer coffee beans," Minuta told reporters in a telephone interview on Thursday.

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