Venezuela seeks 'fair price' for metals exports, traders see problems [View all]

[Bacchus4.0]

http://www.reuters.com/article/2013/08/27/venezuela-mining-idUSL2N0GP01F20130827?feedType=RSS&feedName=financialsSector&rpc=43


CARACAS/LONDON Aug 27 (Reuters) - Venezuela is hiking prices for its metals and minerals exports in an effort to obtain a "fair price" from buyers, but traders warned the move could leave the OPEC nation without buyers for its most important non-oil exports.

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The "sovereign marketing" plan was rolled out in conjunction with promises by Maduro of a broad campaign to crack down on corruption after the arrest of several officials over alleged kickbacks at a state-run company.

"It is the state that sets the price of these products that will be sold, it's not some mafia ... no individual is going to come here and tell us the value of a product that belongs to all Venezuelans," Industry Minister Ricardo Menendez said last week during the launch of the new system.

With the new mechanism, Venezuelan is now selling its metals well above the international price, according to mining industry workers, though it is not immediately evident how the companies are establishing prices.



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"The government has no idea what it's doing ... They put up so many obstacles that clients are losing faith in Venezuela," said one ferrous metals trader who works in Venezuela.

"This is crazy, it's never going to work," said a metals merchant based in the United States. "People are leaving Venezuelan minerals in the ports."

Venezuela's metals industry output has slumped due to lack of investment, swollen payrolls and outdated technology. The contribution of mining to Venezuela's economic growth has fallen by 25 percent over the last decade, official figures say.
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Venezuela's government doesn't seem to have a very good grasp on reality do they?