Venezuelan Government seizes 2 Rice Plants

As of yesterday, Monday March 2, 2009, the Venezuelan Government has seize 2 important rice plants in Venezuela. One of the plants, Primor, is own by the Polar group and solely represents 22% of the market of rice. The rationale behind government intervention is that the private companies are underproducing rice on account of shortages of raw material. Private companies are producing approximately -15% of what they produced exactly last year while the government alleges that theres is plenty of raw (rice) materials.

Over the past 5 years, the government has increased its regulation concerning the sale of rice, coffee, ketchup, vegetable oil, in its frenzy to control inflation. Now those who understand how the market operates, know that its only a matter of time until they creatively comply with such government regulation. On creative compliance I will try to address it separately since its such a deep subject of government regulation. We Venezuelans now can find, Ketchup light or Ketchup hot sauce instead of regular ketchup because its price are regulated, flavored rice instead of white rice, decaffinated and flavored coffee instead of black coffee, so on and so forth...

What is true is that its obvious that this government intervention measure will severely permeate through other wholesale goods. Why? Well a couple of days ago the Government made an announcement calling for economic measures in 15 days, its obvious the government is battling against inflation and the strong loss of purchase power of the Venezuelan Bolivar, and what is worse, the economy seems to have slow down...

My advise, again divest Venezuelan currency and watch for more and more government intervention of wholesale goods. This morning a government consumer protection agency has announced that they will intervene vegetable oil and flour plants.

I also predict that investment and financial frauds schemes will become very popular as the population will severely go desperate...