The price increases approved by the government average 20% over the prices agreed in the adjustment of last April 15th. The new prices for seven basic necessities, published in the official Gazette last week, have been the third price adjustments for this year.

The increase in the price of rice, corn flour, beef, cheese, black beans, sugar and coffee was 20%.

The average increase in the prices of rice was 13.6%, from 1,490 to 1,605 bolìvares per kilo (Bs.). At the beginning of the year, the cost of a kilo of this product was 1,045 Bs., which represents a 53% increase in 11 months.
Corn flour was adjusted 13.7%, from 1,100 Bs. to 1,250 Bs. per kilo. It is relevant to point out that hallacas (the traditional Christmas meal ) were made last year with corn flour at 1,000 Bs..

One of the food products with the greatest price distortions was beef. On this occasion, the price of first rate beef increased from 7,500 Bs. per kilo to 7,888; a 5.1% increase

Second rate beef cuts rose 26%, while third rate beef cuts rose 64.8%. It is strange that the government approved such dissimilar increases, allowing the higher ones precisely on the beef cuts that the lower classes of the country purchase, while the price of first rate beef cuts had the lowest raise.

In April, a modification in the prices of beef was made in order to adjust them to the real market prices. Nevertheless, the prices announced in the Gazette were much below the actual cost. For several months, consumers have had to pay nearly 10,000 Bs, per kilo of prime rate beef cuts.

White hard cheese increased 19%, black beans 31.9%, the two kilo package of sugar 4.8%, while the one kilo package did not increase
A 30% increase was approved for the coffee bean, for a final cost of 3,900 Bs.. Ground coffee did not increase.

Regulation has affected the normal supply of this last product, and the varieties found in the market cost a lot more than the price approved in the Gazette. For example, 200 grams of aromatic or vacuum packaged coffee (which is not regulated) are sold for 2,000 Bs., even though regulated coffee should be sold for 930 Bs... but it’s not available at the supermarkets.

The Official Gazette states in its twelfth article that all stores that sell basic necessities are in the obligation of making all the products mentioned in the resolution available to the public, and that any unjustified non compliance with this disposition will be penalized. Let’s hope that this disposition is complied with.

Some products that are absent from the store shelves have not been adjusted. For example, powder milk has remained at 6,555 Bs. per kilo (in cans) and 5,750 Bs. per kilo(in bags).The price of ham did not increase from 4,000 Bs. per kilo and 5,000 per boneless kilo.

Published in Quantum N.40