Venezuela to cut fertilizer price for PetroCaribe

14 July 2008 19:08  [Source: ICIS news]

CARACAS (ICIS News)--Venezuela's President Hugo Chavez said the country will supply discounted fertilizer components to members of the PetroCaribe alliance in an effort to thwart rising food prices, the state news agency reported on Monday.

Chavez made his comments over the weekend in the oil-producing hub of Maracaibo, where leaders of over a dozen Caribbean nations met to discuss regional energy issues.

Venezuela has up to 100,000 tonnes of urea that it can supply at a discount of up to 40% for member nations that make a request for the product, Chavez said. That amount could grow as Venezuela's Petrochemical Revolution ramps up production of chemicals.

"To the extent that we increase production, we'll have greater possibilities to mutually support [PetroCaribe nations] and ourselves," Chavez said in Spanish.

Eventually, the alliance could use Venezuela's urea production to build a regional fertilizer plant that would act as "a shield" against rising fertilizer prices in the international market, he said.

Lacking oil deposits, many Caribbean nations have joined PetroCaribe, an initiative spearheaded by President Chavez, to gain access to Venezuela's raw materials at preferential prices. Many have highlighted the strain that the cost of fertilizer is causing strain on local food supplies.

The Prime Minister of San Vincent and the Grenadines said over the weekend that the high cost of fertilizers has "considerably" raised the price of food in his island chain.

Already offering discounted oil to its allies in Central America and the Caribbean, Venezuela is also increasingly offering fertilizer components as food prices soar.

In May, Nicaragua announced it was importing 40,000 tonnes of urea from Venezuela, to be distributed at subsidised prices to small farmers.

As well, Jamaica announced earlier this year that it was seeking low-cost fertilizers from Venezuela to ease rising food prices.

($1=€0.63)

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By: Jasmina Kelemen
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