Venezuela Agribusiness Report Q2 2018
The operating environment for Venezuela's agribusiness sector has deteriorated significantly over recent years, due tothe poor macroeconomic climate, a shortage of foreign currency for input purchases, and general government mismanagement.Venezuela's economy will continue to be under extreme downward pressure in 2018 amid low international oil prices and severelyweakened public and private finances. The economy's growing headwinds will weigh on agricultural production and consumption inthe coming years, and we forecast most commodities to stagnate through to 2021/22. We have made a number of adjustments inthis quarterly update to account for the dire situation in Venezuela. Rampant inflation and starvation are depressing theagribusiness outlook of the country, with government mismanagement further deteriorating the situation in the face of a socio-political crisis. Producers of agricultural goods will struggle as rising production costs and controlled prices at the farm level reducemargins. As such, the divergence between Venezuela and its neighbouring countries in terms of agricultural sector developmentwill continue to grow in the coming years.
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