Venezuela to Import Coffee For 1st Time Ever!!
Caracas, July 22 - Venezuela, a traditional coffee exporter that boasts one of the best cups of java in South America, may have to import coffee for the first time ever this year or face shortages, industry experts said. Producers say rising costs and prices fixed by the government have caused production to fall and illegal exports to rise. The government says poor climate and speculation by growers and roasters is to blame.
Venezuela is known to produce some of the best quality Arabica coffee anywhere and, unlike many countries in the region, traditionally consumed most of it itself. But more recently large quantities of coffee have been smuggled across the border to Colombia, where prices have been more than double the fixed 470 Bolivares ($218) per bag that producers are paid in Venezuela.
MP: This story provides yet another example of how central planning and price controls always fail. The laws of supply and demand are not optional. Artificially fix a price below (above) the market-clearing price and you create a guaranteed shortage (surplus). Period.
Update: P.J. O'Rourke summarizes it pretty well: "You can't get good Chinese takeout in China and Cuban cigars are rationed in Cuba. That's all you need to know about communism." (HT: Tim Worstall)