Venezuela's economy has entered a recession and is suffering from food shortages, soaring inflation and rising consumer discontent. Import controls, food price controls, inflation and the overvalued bolivar are causing shortages of essential goods. Shortages are nothing new in Venezuela, but have become much worse over the past three months.

Domestic agriculture production has dropped and will likely to continue to fall as a consequence of government mismanagement, shortages of agricultural inputs and price controls that have hampered production for the past 16 years. Government promises of increased investment in agricultural infrastructure have not materialized, and producers are becoming more and more frustrated.

Post expects wheat, and rice imports to be tight due to availability of foreign exchange. Corn imports are expected to fall due to a contraction in the poultry industry due to rising production costs and controlled prices at the farm level. Consumer demand continues to rise with growing population, and growing food shortages will lead to irregular purchasing patterns and even longer long lines at supermarkets, especial in the interior of the country. Most experts forecast the Venezuelan economy will decline between 3 and 7 percent, due to low oil prices leading to lower foreign exchange reserves.

WHEAT

Based on GTA export data, wheat imports during MY 2013/14 reached a record level 1.87 million tons. Post continues to estimate wheat imports for 2014/2015 at 1.80 million tons, relatively unchanged, but slightly down to reflect uncertainties in dollar availability. World oil prices have reached their lowest levels in several years severely reducing Venezuela's foreign exchange reserves. Historically, the government has made food a priority item for import and dedicated the needed foreign exchange to import enough wheat and other grains to keep mills operating.

Post continues to estimate an increase in wheat consumption to approximately 1.8 million tons in MY 2014/15 due to population growth, concerns of growing shortages, and relatively lower price compared to other food alternatives. Consumers have become accustomed to buying whatever food products are available, such as pasta, an important food staple, even if they do not need them for immediate consumption. Wheat millers report that current wheat inventories are good through March 2015. However, bureaucratic hurdles related to imports, such as delays in receiving import permits and foreign exchange, have become more severe and could impact the flow of future shipments. Ending stocks for MY 2014/15 are estimated to fall to about 457,000 tons, the equivalent of three-month's domestic use.

Wheat Venezuela

2012/2013

2013/2014

2014/2015

Market Year Begin: Jul 2012

Market Year Begin: Jul 2013

Market Year Begin: Jul 2014

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

0

0

0

0

0

0

Beginning Stocks

270

270

332

332

533

457

Production

0

0

0

0

0

0

MY Imports

1,617

1,617

1,951

1,875

1,800

1,800

TY Imports

1,617

1,617

1,951

1,875

1,800

1,800

TY Imp. from U.S.

560

560

686

686

0

0

Total Supply

1,887

1,887

2,283

2,207

2,333

2,257

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

0

0

0

0

0

0

FSI Consumption

1,555

1,555

1,750

1,750

1,800

1,800

Total Consumption

1,555

1,555

1,750

1,750

1,800

1,800

Ending Stocks

332

332

533

457

533

457

Total Distribution

1,887

1,887

2,283

2,207

2,333

2,257

1000 HA, 1000 MT, MT/HA

RICE

There are no significant updates for rice production, supply and demand numbers at this time.

Rice, Milled Venezuela

2012/2013

2013/2014

2014/2015

Market Year Begin: Apr 2012

Market Year Begin: Apr 2013

Market Year Begin: Apr 2014

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

140

140

140

140

140

140

Beginning Stocks

159

159

123

102

70

102

Milled Production

385

385

385

385

380

380

Rough Production

567

567

567

567

560

560

Milling Rate (.9999)

6,786

6,786

6,786

6,786

6,786

6,786

MY Imports

389

528

312

510

425

500

TY Imports

359

500

410

480

425

500

TY Imp. from U.S.

209

0

0

0

0

0

Total Supply

933

1,072

820

997

875

982

MY Exports

150

300

100

215

150

180

TY Exports

150

250

125

200

150

180

Consumption and Residual

660

670

650

680

650

685

Ending Stocks

123

102

70

102

75

117

Total Distribution

933

1,072

820

997

875

982

1000 HA, 1000 MT, MT/HA