Venezuela’s Pequiven blasts fertilizer middlemen

09 January 2008 23:25  [Source: ICIS news]

CARACAS (ICIS news)--The head of Venezuela's Pequiven said on Wednesday the state producer was thinking about setting up its own fertilizer distribution network to cut out “unscrupulous” middlemen.

Saul Ameliach denied comments made by local agricultural leaders that Pequiven's fertilizer prices have risen, and said middlemen were selling agrochemicals at a mark-up, the state wire reported.

As a result, the state producer is thinking about creating its own fertilizer distribution network in order to cut out intermediaries that it says are selling chemicals above government-controlled prices.

"There are unscrupulous [sellers] that buy at the regulated price and then sell to [rural buyers] at another price," said Ameliach in Spanish to the Bolivarian News Agency.

Higher fertilizer costs were recently cited as chief culprits behind steep price increases in products such as rice, corn, sorghum and sugar cane. In some cases, fertilizers costs are expected to jump as much as 40% this year, according to comments attributed to Gustavo Moreno, the head of the Federal Association of Agricultural Producers.

Ameliach debunked the growers' claims, saying fertilizer prices are set by the government and have not increased since 2003.

"I'm announcing to the nation that this information is incorrect and not official," said Ameliach in response to Moreno's remarks.

Venezuela, which had the highest rate of inflation in Latin America last year, has been beset with rolling shortages of basic food products such as milk, eggs and rice.

Producers and government officials regularly trade accusations in response to rising consumer frustration.

Pequiven is calling for more cooperation with producer associations and the energy and agricultural ministries to weed out distributors that are buying fertilizers at official prices and selling them for a profit.

"Our policy is to reinforce our distribution system," said Ameliach. "In order to do so, we are creating a socialist distribution network that will be supported by cooperatives."

Ameliach also noted that greater regulation was needed to tamp down an emerging, cross-border contraband market for fertilizers. In some cases, Venezuela's official prices for fertilizer components are just a quarter of the market price in neighbouring countries.

Ameliach's comments were made a day ahead of an expected meeting with local agricultural producers called to denounce fertilizer distributors they say are charging more than the prices mandated by the government.

By: Jasmina Kelemen
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