First Margarita non-expert Venezuelan CPI. Make your own!

June 30, 2010

Reader Island Canuck has been keeping tabs on prices on that island for the first six months of the year and comes today to report an increase of 35.6%, you may agree or not with his choices, but he did the work.

Let me tell you what impresses me the most about the increases: The fact that so many local products have gone up the most. Look at the Avocados, onions tomatoes, lettuce and green peppers. Spaghetti? For God’s sake, it’s all made here. I can understand the apples, but water? Or Orange Juice.

The puzzle: How come imported microwave popcorn is flat?

In any case, make up yourown index using the data and tell us how it fared. Simply pick a basket, your taste, then calculate the increase in the first six months and tell us the result.

Kudos Island Canuck.


15 Responses to “First Margarita non-expert Venezuelan CPI. Make your own!”


  1. A non-barter economy needs an internal medium of exchange, i.e. money. The rate of change in the Consumer Price Index indicates the rate of inflation, i.e. the annual rate at which the real value of the your money is being destroyed inside your economy.

    There are three fundamentally different basic economic items in the economy:

    1. Monetary items: money held and items with an underlying monetary nature; basically money and money loans.

    2. Variable real value non-monetary items; e.g. property, plant, equipment, raw materials, finished goods, etc.

    3. Constant real value non-monetary items; e.g. salaries, wages, rentals, issued share capital, retained profits in companies, debtors, creditors, taxes payable, taxes receivable, etc.

    1. Inflation automatically determines the real value of your money inside your economy; i.e. the value of money and other monetary items in the economy. You cannot inflation-adjust or update money or monetary items during the current financial period.

    2. Variable item prices are ideally determined in a free market where demand and supply determine the prices of these items. Inflation is automatically taken into account in the process.

    3. Constant item values (prices) e.g. salaries, wages, rentals, issued share capital, retained profits in companies, capital reserves, debtors, creditors, taxes payable, taxes receivable, etc., have to be inflation-adjusted on a monthly basis in an inflationary economy by applying the change in the CPI in order to keep the economy stable.

    If a country does not calculate its CPI correctly, then it is playing with fire – like Argentina and Venezuela are doing.

    The final solution in these cases are always Dollarization.

    Why? Because you need a relatively stable unit of measure in an economy.

    When you inflation-adjust all constant real value non-monetary items e.g. salaries, wages, rentals, issued share capital, retained profits in companies, capital reserves, debtors, creditors, taxes payable, taxes receivable, etc., on a monthly basis by means of the monthly change in the CPI, then you keep your economy stable because you measure you constant real value non-monetary economy in units of constant purchasing power – as Brazil did with a daily index supplied by the government during 30 years of high and hyperinflation.

    For that you need a correctly calculated CPI.

    When you mess around with your CPI which is a basic essential in your economy, then you are on your way to Dollarization.

  2. Kepler Says:

    Holy macaroni! Canuck did a great job. I hope the regime does not now
    prohibit this kind of information from circulating. I am sure it is considered evil by Chavismo.


  3. Nice job! Nevertheless, this is only half of what has to be done to calculate a CPI.

    The second thing that should be done is to assign weights to the different goods. These weights should correspond to what the average Margariteño household spends on each item every month.

    I guess that for the case of food CPI meat (or fish), eggs and bread (or Harina Pan) should be given more weight than articles like Vodka Absolut.

  4. Deanna Says:

    Good job. I knew something was really wrong in the country when agricultural stuff like avocados, plaintains and other tropical fruits which are produced in the country costs more than they cost in the US, As an example, everytime we had to buy plantains in Macuto, we had to pay BsF2.50 per plantain. In Trade Fair in NY, I can get the same plantains, but 10 of them for $1; how do you explain that? And avocados (domestic ones) in Venezuela have sometimes cost us BsF9. Who can afford to eat there?

  5. Vegetable man Says:

    Regarding the vegetables, there’s such thing as “seasons”, you know. Vegetables aren’t produced in the same amount all year, and thus prices are always higher when out of season, doubly so for specialty items like avocado.

    Although in this case, the price increase seems to have more to do with reduction of production/imports of such vegetables than seasonal variations. And even though some of those vegetable can be produced in Venezuela it’s very unlikely they are produced in sufficient amount to satisfy all the demand.

  6. island canuck Says:

    Thank you Miguel for publishing my chart.

    This was never intended to be all that scientific.

    Just an indicator for people to see how prices are changing on a month to month basis in Bolivar terms & how these numbers are at odds with the government ones.

    I would love to have the historical data since the government changed the way they calculate inflation.

    I think it would be very revealing.

  7. Andres F Says:

    Very useful numbers. Thanks!

  8. m_astera Says:

    Good Job, Canuck.

    Re avocados, mangoes and other seasonal fruits, yes the prices vary from early season to peak season, but even the lowest price is twice what it was at this time two years ago. The vegetables are not so much seasonal in this climate.

    I also wonder how much of the produce price increase is due to the embargo against Colombia. Looking at local agriculture that can have some good results; higher prices for the local producers and more incentive to grow crops.

    On the other hand, I just got off the phone with a colleague in Los Andes who wants soil fertility recommendations. That I can do, but many of the fertilizers and minerals were coming from Colombia and there isn’t a source for them in Venezuela unless we can import them from China.

  9. Moraima Says:

    Vegetable man Says: doubly so for specialty items like avocado

    Avocado is not a specialty item in Venezuela. Seasonality does makes sense here, but even taking that into account it is impresive how much the are costing now…

  10. Moraima Says:

    My sources (my grandma in Yaracuy) tells me the season for avocado is actually July-August, but this year because of the draught most of the trees did not produce at all, so that’s why it is unavailable and if you find it cost un ojo de la cara…

  11. Pedrop Says:

    Canuck,
    For the last few years before going to Margarita we have always checked your food price chart ! It’s been very helpful in many different ways. Thanks for the information.

    FYI there’s an excellent avocado tree as you turn in to the Cimarron Suites/ Beach/Terrazas complex. It’s on the first corner just after coming off the main road. They’re free, have been for sometime now.

  12. island canuck Says:

    Ok, I’ll check it out. Thanks Pedrop.

    As others have said it’s been very dry last couple of years but maybe it’s flourishing :-)

  13. A_Antonio Says:

    This demonstrates with numbers my feelings, as I made years ago my house’s food buys, that food inflation usually doubles the general index. In the past, I made some comments about that.

    As in other comments of previous post, demonstrate that the informal workers are accountable as employment for the INE’s unemployment index.

    These are fats which opposition should use and try that people understand to try to wake up from the lies of this robolution.

    Lies, like in another post MO demonstrate, how Regime portrait congratulations directly from UN.

    I am waiting to see soon the portrait of Holly Jesus receiving a copy of Bolivar’s Sword and seeing him making an speech telling to the world that Robolition is the real representation of Heaven; and 21st Century Socialism, God’s words in planet Earth.

    Keep all in the good work.

  14. Gordo Says:

    When I convert to dollars, the prices are quite reasonable. I’m looking forward to going to Margarita and catching up on time spent on my hamaca.

  15. island canuck Says:

    Passed by the supermarket to look for Romaine lettuce that wasn’t available earlier in the week.

    Well it had arrived & I bought some. Price in Jan. was BsF.7,50 per kg.

    Today it was BsF.24,42 per kg – an increase of 225.6%

    Welcome to Socialismo Siglo 21


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 11,869 other followers

%d bloggers like this: