DIPLOMATIC WIRE EMBASSY OF THE RUSSIAN FEDERATION CARACAS, VENEZUELA DECEMBER 8TH, 2016 CLASSIFIED
Dear Vladimir Vladimirovich,
Local press accounts have noted with interest our recently signed Economic Cooperation Accords with Bolivarian Republic of Venezuela, and in particular your munificent offer to supply “all the wheat Venezuela may need to stabilize its supply.” We salute your generous vision in putting forward such offer.
Committed though we are to the strengthening of our fraternal bonds with people of Venezuela, we believe it is important to provide some background information on the peculiarities of Venezuela’s internal market that may complicate this exchange.
We must be mindful that, at present, our comrades in the BRofV are operating system of price controls. Vladimir Vladimirovich may remember such system from days of youth. Under current system, price of a loaf of bread locals know as “canilla” is capped at 100 bolivars. This loaf is small — 130 grams — but value of bolivar smaller still. It works out to some Bs.770 per kilo of bread, at current rates it is, perhaps this is 11.43 rubles per kilo, or just 18 American imperialist cents.
Vladimir Vladimirovich will understand problem quickly. In our beloved Moscow 1 kg. of good Russian bread is now selling for 60 rubles: more than five times as much. But more to point, in neighboring Republic of Colombia a kilo is selling for 118 rubles, more than 10 times as much as in our brotherly BRofV, and in the northern part of the Federative Republic of Brazil a kilo of bread can go for 146 rubles…nearly 13 times the price of Venezuelan bread.
Vladimir Vladimirovich will quickly see problem with promise of yesterday. As he may remember from days of youth, prices set at center sometimes lead to mismatch of supply and demand. Our estimate is that at current internal price, Venezuela demand for wheat is effectively infinite number.
It may seem difficult to believe that small country like BRofV could absorb Mother Russia’s entire production of more than 62 million tons of wheat. Certainly it would be challenge for each Venezuela man, woman and child to eat 5.5 kilos of bread each day.
Yet existence of neighboring countries with settled smuggling routes, together with what Venezuelan comrades call “stew”, create alarming possibility in light of Vladimir Vladimirovich’s generous offer.
It is our concern that housewives of St. Petersburg and Novosibirsk may find such generosity hard to comprehend. And that comrades of BRofV may struggle to find the $9.3 billion that would be needed to pay for entire Russian harvest.
With respect, therefore, we wish to encourage further study of potential knock-on impact of sending entire production of Russian wheat to our Caribbean friends in doomed attempt to stabilize unstabilizable market.Caracas Chronicles is 100% reader-supported. Support independent Venezuelan journalism by making a donation.