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No Spaghetti For You: Venezuela Noodle Maker Halts Production Due To Lack Of Dollars
Despite the endless claims by Maduro and his merry men that the new-and-improved SICAD II anti-hyperinflation FX allocation system is working well, it seems it is anything but...
- *VENEZUELA'S EMPRESAS POLAR HALTS PASTA PRODUCTION ON FX SHORTAGE
The firm, which produces multiple pasta products, has been forced to 'suspend' operations due to a lack of raw materials (wheat) because it has no foreign currency to use for settlement. Polar says it is working with authorities to find a solution.
As Bloomberg reports,
Venezuela’s Empresas Polar has temporarily halted pasta production at its plant in Maracaibo because of delays in obtaining foreign currency from Cencoex to import wheat, the company said today in an e-mailed statement.
Operations at the plant, which makes the Primor and Gran Senora brands of pasta, stopped on April 27 after inventory that had been loaned from other companies ran out
Polar says its working with government to find solutions to import wheat
And the full statement from Empresas Polar:
Polar Foods plant in Maracaibo Commercial, which produces the brand pasta Primor and Great Lady , was forced to temporarily suspend its operations due to the delay in the settlement of foreign currency by Cencoex (formerly Cadivi) for the purchase of wheat durum, imported raw material required for the manufacture of pasta.
Operations were halted on Sunday April 27, after wheat inventories were obtained through loans from other companies were sold.
As this is a case of force majeure attributable to the company, the procedure for waiver of the employment relationship with the plant workers agreed, as stated in Article 72 of the Labor Law, the Workers and Workers.
The situation is known to the national authorities, who have held numerous communications and meetings, which were alerted in a timely and responsible manner on the risks of delayed settlement currency for the payment of debt suppliers and their effects on the production of an item that is part of the staple diet of Venezuelans.
Polar Enterprises continues to work with the authorities in the search for solutions to obtain in a timely manner, the raw material to restart production as soon as possible Pasta of Primor and Great Lady.
So no toilet paper and now no pasta... how's that whole socialism thing working out? We await Maduro to proclaim them a national treasure and allocate funds accordingly - lik ethe oil companies - or... call them speculators for not having enough dollars and throw the executives in jail.
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I think the bigger story here is the demand for dollars. There is still a shortage of the fed's funny money no matter how much they print.
I'm not sure they are suffering enough. Let's send all of our Harvard eCONomists down there to help them out. Plenty of comradery to go around.
Send the same Chicago boys who were in Chile.
The US has certainly sent them something to "help"
http://www.counterpunch.org/2014/04/25/the-dirty-hand-of-the-national-en...
Venezuela are certaialy screwing up things on their own but this can't help the people.
No Spaghetti?
Forget it Jake. It's Chinatown.
"¡Oye, basta con la pasta ya!"
(Translation: "Hey! Enough with the pasta already!")
As in, "We're tired of hearing about it."
You could say that Maduro, (ripe), is over-maduro. And it's the tropics.
In Weimar Germany, the government thought the problem was that there was too much demand for the Mark, so the solution was to print more and more Marks to satisfy the demand. Didn't work out so well.
It's simply a matter of something is better than nothing. i.e., we know that on the international stage the Venezuelan currency is nothing. Unless they can grow their own wheat then they will need dollars to import it, and the host of other things they cannot produce locally.
The shortage of dollars you speak of only exists locally in Venezuela, not globally. But that is only because there is no alternative in Venezuela.
We are importing less oil and less dollars are going out, Expected to go on for the next four years or so. Should be interesting as the dollar will stregnthen and gold should usually dip however EM demand and the Yen dropping may keep it on the stable side. I am confused about gold in the next 4 years but not in the next 8.
@FutureShock : Did you happen to forget about the 8 to 10 Trillion Dollars already exported overseas? The concern is not dollars going out but dollars coming back home to the roost.
Forgive my ignorance but what are the actual mechanisms for the dollars to return to the US? Intuitively I know it has to happen, but I don't know how it will happen.
I'm in Australia and we have recieved a lot of those printed dollars. So if someone could show me how those dollars will end up being ripped out of Australia that would be great. Does it happen when Australian institutional investors park the money in the US markets?
It happens when foreign countries no longer accept dollars for settlements.
They pay us in dollars for any goods they import(until they run out of dollars) and refuse to accept dollars as payment for their goods.
Then the FX markets light up and the dollar plunges as every country in the world races to discount their USD in a desperate attempt to convert it into anything else they can.
This guy should travel to Iraq. There are pallets of that shit all over the country.
Just every once and a while you guys come up with the BEST headline comedy....
NO SPAGETTI FOR YOU ! Absolutely brilliant !
Keep up the good work.
ps. a little less gore would be ok.
Margaret Thatcher was right. Eventually socialists do run out of other peoples money.
Nice one! :)
Ahhh....Thatcher, the milk snatcher......
At least they have socialism. What else do they need?
http://www.zerohedge.com/news/2014-01-23/thursday-humor-real-reason-vene...
Well. if you got sit at home with a dirty ass and an empty stomach....this is the place to be.
Well if there's no pasta coming in, then there's no S**T coming out. So at least the dirty ass won't be a problem anymore.
Si, you don't eat, you don't poop; you don't poop, you die!
Another century or two of deprivation & misery and they'll have this whole socialist economics thingy down to an exact science ;-)
who fucking cares??
socialists run country, socialists fuck up country, masses suffer
lather, rinse repeat
I think the Venezuelan shampoo factory closed down last week...
Socialists always run out of other peoples shampoo.
Its not socialisms fault!!!
The dirty kulaks and capitalists are hoarding the pasta, shampoo and toilet paper so the price will go up at the expense of the proletariat. Socialism ensures plenty of everything for all workers. There goes a kulak now! Get him!
hey venezuela!
buy some wheat from the pesky ruskies and settle with some tasty rubles!
sheeesh....do i gotta do everything around here?
oh yeah while i'm at it....the "capitalists are kool" and the "socialists suk" meme is fuking stale.
Sorry smelly, I can't spare a square. Ask your dear leader if he has one.
As Ness. says, "Socialist with itchy ass, soon become toilet paper salesman." ©
Fine the company $10,000 per day for every day it doesn't sell noodles! Profiteering, counter revolutionary, running dog reactionaries! Noodle hoarding Capitalist bastards!
Noodle hoarding Capitalist bastards!
Thanks Bastiat. In my varied career and businesses, it was sometimes hard to describe who I am, and what I'm about.
Close enough;)
The thing is, Bastiat is exactly right on the rhetoric. During the holodomor (Stalin's starvation of Ukranian peasants), the communist party people would say "Since you are still alive, you must be hoarding food which belongs to the state."
I hate communists.
I'm sure Thomas Piketty can solve this problem.
Let them eat cake!
Let them eat plantains.....
They will never see the light, Goldmon Sachs could straigthen Venequela out overnight. You just declare the country and bankrupt entity/corporation begin issuing their social security numbers in London, print all the pesos they need and tell them to prepare for the invasion of Bolivia.
The end in text book fashion.
I suppose we will have to send Bill Dudley down there. Who needs pasta when one has iPads?
Score 1 for the Empire. Blame it on socialism.
Send in the NGO's, the CIA, the IMF and maybe the drones and Al Qaida, who knows?
If necessary blame Cuba and send in the Marines.
Like every other EM country, Venezuela urgently needs to escape freom the dollar.
If the outcome is different from the usual collapse, coup or IMF takeover this time, it will probably be because of the need of Russia, China and Brazil to escape from the dollar now also.
Isn't Venezuela's oil of the heavy sour type?
And aren't pretty much the only refineries capable of handling it on the U.S. Gulf Coast?
Then wtf doesn't Venezuela have dollars?
(the last ? was rhetorical.)
Yes and no (about sour crude and refineries). There were heavy investments by China in Central and South America into wells, pipelines and refineries. There is one other point of extreme significance to note, summarized below.
Tech Talk - changes in South American exports
Thanks for the blog link. I will have to read it in more detail later on.
Briefly, China is taking up the slack in oil demand for now, but will that last? I doubt it. China will implode from its credit binge causing a big glut in supply, with no picking up the slack from the developed countries as they continue to experience tepid growth. (Not over the long haul, peak oil is real imho.)
But then let's assume China doesn't implode and there's no drop in demand. Then the most urgent question is the threat to the petrodollar as the world continues to realign. Petrodollar won't collapse overnight, but the effort to undermine it is serious and ongoing. This leads to further tensions, emergence of trade blocs, alternate settlement means, further exacerbating our present international financial difficulties, further popular unrest, international tensions and you can see where this is going... It looks to me like deepening worldwide depression followed by war.
As for Venezuela, it can't do without dollars. It will continue to experience shortages because it can't buy everything from China and the world still mostly trades in dollars. For example, to make pasta, you need wheat and without dollars, your choice of vendors becomes greatly constrained. Thus world trade dies from a thousand cuts...
It's late for me, I have to sign off for now.
Why don't these countries build their own refineries? And don't tell me its expensive! Middle East countries are tripping over themselves to build 2000 foot buildings in the middle of the desert. They have plenty of money. And there are plenty of experts that would take the contract.
A refinery and a building are quite different things. Refinery must be kept utilized in order to bring in money, leasing office space is much less complicated. If you consider arab's fond for work, you'll get the picture.
Of course, they do have refineries, but at least in Saudi Arabia, they are run by Saudi Aramco, which is a state in a state, using mostly expat workforce.
Refineries are not only expensive, they must be "tuned" for a particular crude oil composition. Refining is also very thin margin business, so that least efficient refiners go out of business quickly, because they can't match prices offered by more efficient refiners. There is also a problem of capacity, as demand for fuel falls, unused capacity costs money to maintain, further eroding efficiency.
In the end, cost of building a refinery is only one small fragment of the whole picture.
I do not know what is going to happen. I've read that global financial system is going to melt down under a mountain of debt long before crude oil supply goes significantly down. Once the financial system has melted, it will take everything else with it, including crude production. In the middle of this article is a chart that more or less explains everything.
Wait until Polar stops brewing beer. Then it will get ugly real fast!
"So no toilet paper and now no pasta... how's that whole socialism thing working out?"
LOL.
Not too well as it happens. Is that a surprise? Socialism always destroys everything in its path.
Fatboy Slim - Weapon Of Choice [Official Video]
http://www.youtube.com/watch?v=wCDIYvFmgW8 (3:51)
Drunken sailors usually end up hungover and broke. Argentina is having similar problems, but thew owe a shit ton of money to the IMF. Venezuela paid back their IMF loans ahead of schedule and is rich in oil. If they are not spending like drunken sailors, they are stealing like 3 bundle a day heroin addicts.
If they don't have toilet paper then they don't need pasta.
Just get their central bank to "print more flour"!!!
Can't Madura just command more pasta to appear? Maybe we should send them the Magic Obama.