The Ripple Effects of Venezuela’s Sugar Shortage

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Posted by omeditors | Posted in Economics | Posted on 07-06-2016

The cessation of Coca-Cola production in Venezuela is the result of a lack of sugar. One positive note here is the beverage can still be purchased in sugar-free versions. At least that is the positive spin some are putting on the situation. In truth, there are more problems associated with a lack of sugar than just the ceasing of Coca-Cola distribution. The domestic sugar industry clearly is in trouble.
Venezuela is suffering from an energy crisis and a massive drought says expert Danilo Diaz. Electricity, fuel, and water are necessary to maximize production and harvesting on farms. The refining of sugar in factories require fuel and power, too. With electricity being rationed and the country’s water supplies being depleted, farming comes to a halt.

According to expert Danilo Diaz Granados importing sugar is not feasible under the current conditions. The government of Venezuela owes so much money to importers, they simply are no longer importing products in high volumes. Dairy shortages are a direct result of the government not paying diary farmer bills to neighboring countries. Under conditions like this, sugar shortages are to be expected.

Those who work in industries related to sugar production are going to suffer financially. If Coca-Cola is going to drastically curtail production, then it is not going to need the current levels of staffing it employs.

Economies on the macro and micro levels are interconnected in a great many ways. The sugar shortage in Venezuela is going to display some unfortunate examples of this.