Financial News

  • 18 May 2013, 11:02

Venezuela Hit By Toilet Paper Shortage Crisis

Venezuelans have been hit by a chronic toilet paper shortage leading to empty supermarket shelves and long queues to snap up the remaining rolls.

When new stocks arrive at supermarkets customers have been rushing in to fill their trollies.

The country is used to a scarcity of basic food items such as milk and sugar but even by the country's usual standards the toilet paper shortage has caused considerable consumer panic.

One 70-year-old woman said she had been trying to find toilet rolls for two weeks before locating a few rolls in a supermarket in Caracas. Maria Rojas said: "Even at my age, I've never seen this."

Another customer in the same supermarket, Maria Perez, said: "Here there's a shortage of everything - butter, sugar, flour." But, she added: "There always used to be toilet paper."

President Nicolas Maduro, who was chosen by the dying Hugo Chavez to carry on running the country and won April's election, claims it is a conspiracy to destabilise the country.

However, the government has agreed to import an extra 50 million toilet rolls to cope with demand.

His Commerce Minister Alejandro Fleming said "excessive demand" for tissue had built up due to a "media campaign that has been generated to disrupt the country."

He said monthly consumption of toilet paper was normally 125 million rolls, but current demand "leads us to think that 40 million more are required."

"We will bring in 50 million to show those groups that they won't make us bow down," he said.

Economists say Venezuela's shortages of some consumer products stem from price controls meant to make basic goods available to the poorest parts of society and the government's controls on foreign currency.

Steve Hanke, professor of economics at Johns Hopkins University in the US, said: "State-controlled prices - prices that are set below market-clearing price - always result in shortages. The shortage problem will only get worse, as it did over the years in the Soviet Union."

But economic theory does little to help those down to their last few sheets.

"I've been looking for it for two weeks," Cristina Ramos said at one store. "I was told that they had some here and now I'm in the queue."

Many factories operate at half capacity because the currency controls make it hard for them to pay for imported parts and materials.

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