Low oil prices aren’t the only thing hurting the Venezuelan economy these days. A sugarcane shortfall there has forced Coca-Cola to stop producing its pop in the country.


Although the company will still produce its sugarless drinks like the regional version of Diet Coke (Coca-Cola Light), there’s not enough sugarcane in the country for Coca-Cola to produce other drinks. Rising costs have, in part, stifled production, sources revealed. The announcement marks another serious blow to Venezuela’s crippled food sector.

Sugarcane production has been falling due to price controls and rising production costs, as well as problems in obtaining fertiliser.

Fruit juices and water will continue to be produced by the firm’s 7,300 employees, in four bottling plants and 33 distribution centres. Imported Coca-Cola will still be available, but perhaps at a price inaccessible to ordinary Venezuelans. Latin America is the world’s largest market for Coca-Cola, with 29 per cent of the company’s 1.9 billion cans a day consumed in the region.


President Nicolas Maduro, struggling to keep the country afloat, has blamed the crisis on low water levels in Venezuela’s biggest hydroelectric dam, which have caused widespread power cuts.

People queue to try to buy basic food items outside a supermarket in Caracas. He also blames the implosion of the country with the world’s largest oil reserves on “economic war” waged by the US. A 60-day state of emergency was declared last week, amid growing opposition protests, and on Friday Mr Maduro announced the country’s biggest ever military manoeuvers, apparently designed to put on a show to the US and deter “foreign invaders.”
Meanwhile, queues for food and basic household items like toilet paper last for many hours, and violence from mobs across the country grows.

Last month beer production was stopped by Polar, Venezuela’s largest food and beverage company – and biggest private company overall – because of a lack of barley.

Coca-Cola operates with a worldwide chain of bottling plants which buy concentrates, beverage bases and syrups from the US-based headquarters, and are then responsible for the local manufacture, packaging, merchandising and distribution.

Kerry Tressler, spokesman for Coca-Cola, told sources that local sugar suppliers in Venezuela informed the company that they will temporarily cease operations due to a lack of raw materials.

As a result, many smaller farmers have turned to other crops that are not price controlled and thus generate higher income.

Venezuela is expected to produce 430,000 tonnes of sugarcane in 2016/17, down from 450,000 tonnes for the previous 12 months, and import 850,000 tonnes of raw and refined sugar, according to USDA figures.
Venezuela’s economic dependence on oil has led to a crisis in recent years with global prices falling.

Financial analysts reports that the country’s economy shrunk 5.8 percent last year and is expected to contract an additional 8 percent this year.


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