Is it worth “making a market” in Cúcuta for the tachirenses?

Photo: La Patilla

 

Maintaining a family group with more than three members in Venezuela is becoming more difficult every day, especially after the last quarter when inflation, both in food and services, again exceeds the budget of the majority of Venezuelans.

By La Patilla

Mar 14, 2023

Táchira, being a border state, is not only affected by the complex humanitarian crisis that is still being suffered throughout the country, but also suffers the consequences of the economic difficulties that Colombia is facing.

In a tour carried out by the lapatilla.com team through the main supermarket chains in the city of San Cristóbal and the popular market “Los Pequeños Comerciantes”, as well as the popular market “Cenabastos” in Cúcuta (Colombia), a great difference was observed in the prices of fruits, vegetables and other produce.

In the case of groceries, charcuterie and proteins, prices vary according to the currency the consumer has, in addition to the logistics costs of traveling to the sister country.

While cleaning and personal hygiene products in the popular “Cenabastos” market, even in expensive supermarkets in the city of Cúcuta, remain almost three times below the prices offered in Táchira.

For the economist Aldo Contreras, it is important to evaluate the budget before leaving San Cristóbal, since he assures that “it is not true that there (Colombia) everything is cheaper, because what many consumers do not do when going to Cúcuta, for For example, it is adding the expenses of gasoline, transportation, insurance, internal transportation, lunch. So, if we add those costs to ‘make the market’, as Venezuelans commonly say, and depending on the amount of the purchase, it will be cheaper on this side (Táchira).

Petro’s Colombia

The specialist emphasized that the Colombian economy “had one of the highest exchange rate depreciations in Latin América, above 25%, since the exchange rate reached, between October and November 2022, above 5,008 pesos per dollar for the first time in the history of that country as the result of some economic and tax reforms that are taking place.”

Every time there is an impact on the Colombian economy, after a few days it is reflected in the increase in the prices of food and services in Táchira.

It should be noted that the Colombian peso continues to be the “almost official” currency in this Andean state, followed by the dollar and the bolivar. The latter is only used for digital transactions, since bolivars in physical or cash are almost unknown in Táchira, much less accepted in stores, not even by any informal vendor.

The economy in Táchira was finally “Colombianized”, since Nicolás Maduro himself, on February 16th in his speech during the signing of the Commercial Partial Scope Agreement No. 28 at the Atanasio Girardot international bridge (known as Tienditas bridge) in Ureña, He said: “The monetary problem is solved between the North of Santander and Táchira, there is only one currency for commercial activity, that is already solved,” referring to the common use of the Colombian peso.

But public workers continue to earn bolívares, which when used to buy pesos or dollars, lose even more value. When they go shopping, with what a few months ago they could buy 12 products, now they can only buy between four or five products.

Exchange differential

It should be noted that in the popular markets of San Cristóbal merchants do not accept bolivars in cash. The most used currency is the Colombian peso; the dollars are accepted according to the seller’s discretion which, in general, are most of the time “rounded up” to his benefit.

In the popular markets, there are very few places where they have “points of sale” (card readers) for payment in bolivars with debit cards, while in the supermarket chains of San Cristóbal, they are governed by the exchange rate established by the Central Bank of Venezuela.

When purchases are made in Cúcuta, merchants only receive Colombian pesos. Venezuelans who cross the border with dollars to buy food or medicine must go to exchange houses, where the rate generally varies every day.

This is the exchange movement at the border: while in Táchira they convert a dollar for 4,500 pesos, in the exchange houses in Cúcuta the conversion is lower, that is, 4,300 pesos per dollar. Even if the difference is only 200 pesos, when a certain amount is changed, it does feel in the pocket, because fewer pesos are received.

In the case of international credit cards, they do go through any point of sale, according to the rate of the Central Bank of Bogotá.

Food substitution

Nayibe Colmenares, a single mother of two minors, commented to the reporting team of lapatilla.com while buying potatoes and tomatoes in the main popular market of San Cristóbal: “Since the beginning of the year, I have to spend much more than before. One of the things that affects me the most is that I previously traveled to Cúcuta and brought many things, especially personal hygiene products that are much cheaper there, but since I was extorted (by alleged members of the Aragua Train), I prefer to shop here. Even though you can go by car right now, I chose to do my shopping here and I have to spend a lot more.”

Inflation, which continues to rise, has forced Nayibe to substitute some food: “To change chicken thighs for chicken wings, so that I have enough money, since there are three of us at home and the children must eat protein.”

Colmenares emphasized that she has always consumed Colombian products, “because even if they are brought from there (Cúcuta), they are worth a little less.” Likewise, she mentioned the new and high costs in services such as electricity, water, internet and cable TV.

Inflation on both sides of the border

According to the latest report from the Venezuelan Finance Observatory, inflation on the basket of food and non-alcoholic beverages for the month of January 2023, stood at 35.5%. While in the neighboring country, according to the indicators of the National Administrative Department of Statistics (Dane, Colombia), during the months of January and February of this year, in Cúcuta inflation was 16%, the highest in the entire country.

The economist Contreras explained that with the arrival of Venezuelan tourists to the capital of Norte de Santander, which also serves as a business center, “has made Cúcuta remain in the ranking of the most inflationary cities in all of Colombia in the last five months.”

In the case of Venezuela: “the first two months of the year show a significant contraction in consumption. Consumption has fallen by around 15%, resulting in a contraction in commercial sales of between 20% and 25% on average.”

He considers that this context would be forcing companies in the region to reinvent themselves, based on the “law of supply and demand, that is, when there is excess supply with low demand prices tend to fall, so the economy is being more competitive to be able to face the pricing strategy which perhaps the supermarkets in Colombia will maintain.”

“We must also add the salary increase in Colombia and the global economic recession, which was already on the horizon a couple of months ago when it was stated that due to post-pandemic effects, there would be a contraction in the world Gross Domestic Product (GDP),” he said.

In Venezuela, inflation in dollars was 47% in 2022. The costs of goods and services have risen, but in recent days in Táchira supermarkets have implemented a slightly more aggressive pricing strategy trying to seduce and show that not everything “It is cheaper in Cúcuta”.

In the case of the food stores and supermarkets of Táchira, Contreras stressed: “In many the sale of food has fallen, but they have increased the sales of delicatessen and meat products. However, there is a sector in which it is very difficult to compete: personal care and cleaning products. While in Venezuela a liter of disinfectant costs 2 dollars, in Colombia it is 0.50 cents. These differences are difficult, because Colombia has a Free Trade Agreement with the United States, it has raw materials that arrive in Colombia and allows them to produce more efficiently and without such high costs, unlike Venezuela.”

He does not rule out that a new “boom” in the livestock and agricultural sector will arrive in Venezuela in the coming months, in order to try to boost the economy. He recalled other sectors in which investment has been made in recent years, such as the case of “the boom in “bodegones” (delis, specialty stores), pharmacies, restaurants, now we are moving towards other sectors of the economy that could have an impact, especially with the food sector, when production has fallen due to the effects of climate change,” Contreras pointed out.

Read More: La Patilla – Is it worth “making a market” in Cúcuta for the tachirenses?

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