By Jeremy Morgan
Latin American Herald Tribune staff

CARACAS – Consumer demand is slowing down in yet another warning signal that the economy is going into reverse gear under pressure from the decline in oil export earnings in the wake of the global financial crisis.

Incomes are estimated to have shrunk by about three percent during the first quarter of this year compared with the same period of 2008, and the effect is starting to be seen in supermarkets, corner stores and stalls in the streets.

Datanálisis, a consulting and polling company, calculates that the decline in personal earnings has been matched by a similar fall in consumption during the first three months of this year. Purchases of meat, chicken and fish are all said to be down, prompting suggestions that a deterioration in the national diet may also be under way.

Food is major item of household budgets. Datanálisis reckons that the average family spends around 42 percent of its budget of food.

The rising cost of food – prices of which increased by 36% last year, against the overall average of 30.9%, according to the Venezuelan Central Bank – means this proportion could rise in future months, or so the statisticians suggest.

“The money is just getting tighter all the time,” complained a middle class lady as she repeatedly picked items off a shelf in a supermarket and then put them back again. “There’s an irony in all this. The shortages seem to be less common now but that’s probably not because there’s more to buy but because we’re buying less. I certainly know I am.”

All this comes amid suspicions that President Hugo Chávez is pursuing a policy of deliberately resorting to imports rather than boosting national farm output in order to cover food demand.

On Thursday, the ranchers federation, Fedenaga, claimed that imports had cost its members BsF400 million this year, pushing some of them to the borders of bankruptcy. Per capita milk consumption was now down to 19 kilos, compared with 23 kilos last year, Fedenaga President Genaro Méndez claimed.

On Wednesday, government officials had raided a pasta warehouse belonging to Cargill – one of the world’s seven largest grain and cereals companies. National Silos Superintendant Carlos Osorio claimed that 80% of the product found there was prime quality and only 20% of the standard type subject to official price regulation. “No company can be above the interest of the Venezuelan people for a capitalistic interest,” he declared.

But if the food budget is being squeezed, some other household purchases such as white goods (washing machines, refrigerators, and the like) seem to be on indefinite hold. However, this may not be entirely down to slimmer wallets.

A report in El Universal newspaper claimed that prices for these goods were rising because of delays in the authorization by the Foreign Exchange Administration Commission (Cadivi) of hard currency permits for importers.

Applications for hard currency for these sorts of imported goods were being held up for between 90 and 120 days, the newspaper said. At the same time, retail prices for white goods had jumped by an average 50% during the first four months of this year, it added.

People who believe that Chávez is importing food to undermine his critics in the farming community and food processing industries suggest that Cadivi is tightening up on funds for other types of imports.

“The fear,” said an economist who works in the state sector and prefers to remain nameless, “is that otherwise there’ll be a foreign currency free-for-all leading to a drain on the official reserves.” The reserves stand a little below $30 billion, the level which the government deems “optimal” for an economy such as Venezuela’s.

Cadivi is said to be accumulating a backlog of authorizations for foreign airlines. According to the Airlines Association of Venezuela (Alav), airlines are now waiting for authorizations worth $320 million.

Some airlines have yet to receive a ruling from Cadivi on applications dating back to October last year, according to Alav Executive President Humberto Figueras. The worst affected airlines are said to include American Airlines, Air France and Air Europa.

Within the industry, there’s said to be talk of some airlines mulling the possibility of cutting back passenger capacity on flights, or reducing the number of flights in and out of Venezuela because of the lack of hard currency needed to pay operating costs.