May 18, 2011 / 7:11 PM / 8 years ago

Venezuela checks Cargill warehouse amid shortages

* Part of crackdown on alleged price-gouging

* Chavez government has tense ties with business

By Mario Naranjo

CARACAS, May 18 (Reuters) - Venezuelan officials and soldiers inspected a warehouse of U.S. agribusiness giant Cargill Inc [CARGIL.UL] on Wednesday as part of a crackdown on alleged hoarding and price-gouging with foodstuffs.

During 12 years in power, President Hugo Chavez’s socialist government has had fractious ties with private business, nationalizing swathes of the economy and in the last two years increasingly eyeing the food and agriculture sectors.

With Venezuelans complaining of oil, flour, meat and other shortages in recent days, Chavez over the weekend urged ministers to hunt speculators and said he would have no hesitation in expropriating any companies found guilty.

Government officials, together with armed National Guard members, found 148 tonnes of food oil at the Cargill warehouse in Caracas during Wednesday’s operation.

“We are checking how oil reaches black market sales points and why it is not in the supermarket shelves,” said Augusto Montiel, the head of government inspection body Indepabis, without making any specific accusation against Cargill.

“We need a supervisory procedure so that everything in this distribution plant reaches the market,” he added.


Political risks in Venezuela [ID:nRISKVE]


Local Cargill representatives were unavailable to comment.

In 2009, Venezuela temporarily seized a rice mill operated by the Minnesota-based company.

More than 200 companies, mainly small ones, passed into the hands of the Venezuelan state last year.

Since the oil, heavy industries and telecoms sectors have seen major nationalizations in the past, the recent emphasis has been on increasing state control over food supply.

Chavez has often threatened to seize brewer and food processor Empresas Polar, Venezuela’s top private employer.

Critics say shortages arise in the OPEC member nation’s economy due to incompetent policies by the Chavez government.

Nationalizations have created a siege mentality among private companies, and difficulties in obtaining foreign currency can interrupt import operations and cash-flows.

The Venezuelan leader is heading towards a presidential election, expected at the end of 2012.

Though currently favorite to win and rising to above 50 percent in opinion polls of late, widespread dissatisfaction with public services, crime and high prices gives the opposition its best shot at power in years.

Nationalizations have in the past played well among Venezuela’s poor majority and fired up Chavez supporters. (Writing by Andrew Cawthorne; Editing by Frank Jack Daniel and Cynthia Osterman)

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