Sugar shortage forces Coke to halt production in Venezuela

Coca-Cola has announced its plan to halt production of its sugar-sweetened beverages in Venezuela due to scarcity of sugar in the country.

A representative of Coca-Cola in Venezuela said that the company will continue producing sugarless drinks such as Coca-Cola Light (Diet Coke). Coca-Cola is calling on suppliers and government authorities to take the necessary actions for a prompt solution, Coca-Cola spokeswoman Kerry Tressler said in a statement to media.

"Sugar suppliers in Venezuela have informed us that they will temporarily cease operations due to a lack of raw materials," she added.

Venezuela is facing skyrocketing inflation of 700 percent and a worsening food crisis. The economy is on the verge of collapse due to a record fall in prices of oil in the international market.

The state of deep recession has triggered spontaneous demonstrations across the country. Lootings have become more common amid worsening food shortages, frequent power cuts and the world's highest inflation.

Drop in sugarcane production

Over the past several years, the combination of price controls, rising production costs, lack of foreign exchange, restrictive labour laws, and a lack of basic inputs such as fertiliser, have resulted in a drop in Venezuela's sugarcane production with fewer planted hectares (acres) and lower yields.

Many smaller farmers have turned to other crops that are not price controlled and thus provide greater income.

The production of sugar is expected to fall to 430,000 tonnes in 2016/17, down from 450,000 tonnes the previous year.

Venezuela's largest food and beverage company Empresas Polar stopped production of beer last month because of a lack of imported barley, a raw material used in the production of the beverage. Venezuela shares a border with Brazil, the world's largest producer and exporter of sugar by volume.

A shortage of raw materials in Venezuela is hitting one sector after another. The country's economic and political crisis has raised concern about political violence. Venezuelan President Maduro has allowed the Venezuelan army to distribute and sell food.