State foreign exchange shops sell the same items at more expensive prices
14ymedio, Juan Diego Rodríguez/Olea Gallardo, Havana, 3 July 2024 — A day after the new measures announced by the Government on June 27, which establish a maximum profit margin of 30% on private sales to the State, it is not yet known with certainty whether or not the prices are capped for six products in private retail stores. There is only one thing certain: these basic necessities included on the list of capped prices by some municipal governments this weekend disappeared from the shelves on Tuesday.
On Saturday, the authorities of Plaza de la Revolución (Havana), Jobabo (Las Tunas) and Pinar del Río published lists of products with maximum prices for cooking oil (900 pesos per liter), chopped chicken (680 per kilogram), powdered milk (1,675 per kilo), sausages (1,045 per kilogram), pasta (835 pesos per kilo) and powdered detergent (630 pesos per kilo). But yesterday, Monday, when the regulation was supposed to come into force, in municipalities like Boyeros they said that they didn’t know anything, and among the businessmen it was all rumors and confusion.
“Does anyone know anything about the official prices? We’re confused.” The comment of Yulieta Hernández Díaz, president of Grupo de Construcciones Pilares, summed up the state of the matter well.
This Tuesday, the bewilderment of Cubans is even greater. The agro market operated by the Youth Labor Army (EJT) of the Armed Forces, at 17 and K in El Vedado, Havana, usually very well stocked, had almost all its shelves empty. The few products for sale were piled up together on the top shelves on the K Street side.
The sellers, however, responded to the surprised customers with a simple shrug of the shoulders. “They say they don’t know, but it’s clear that they must know something,” said an old woman. It was the same in the Arango market in Luyanó. “There’s nothing on the shelves; it’s dead, empty, a very strange thing,” a neighbor told this newspaper.
In the butcher shop at 17 and K, which operates as a private business, there was only chicken breast and picadillo [chopped meat]. The clerk said that he didn’t know why there were no chicken quarters or thighs, but customers could hear him talking on the phone with someone who told him that he that he had to change the blackboard: “Now I have to put the prices in kilograms.” He didn’t mention the amounts.
In the private business (MSME) Zona K’liente they weren’t selling the bird either. “There is no chicken or milk anywhere.” “There is no chicken and there won’t be,” was the forceful response of the butcher of the 19 and B market, also in El Vedado. The reason? “Because they capped the prices.” And he cried out: “Better to raise chickens at home!”
Something happened, of course, in the last three days, and the authorities were reluctant to report it. A butcher from Sancti Spíritus gave the explanation to this newspaper: yesterday he was introduced to some “comrades” of the Party along with two inspectors, who warned him of the entry into force of the regulations and “they read the prices.” They didn’t give him any citation: “It was just a verbal warning, and they told me that there could be consequences if I increased the price of those products.”
“They say they don’t know, but it’s clear that they do”
It was just what an anonymous official source had warned in an audio that spread like wildfire since Saturday, in which the “established” prices were specified. The voice, with an accent from the west of the Island, assured that “groups of confrontation” were going to go to private businesses to give them “a wake-up call.” Subsequently, it warned, there might be “a forced sale of these products or confiscations of them for the social institutions that also need these products.”
As a result of the uncertainty and the threats, private individuals have simply hidden the merchandise. Also in Sancti Spíritus, a neighbor said that he had managed to buy chicken in a nearby MSME, “just for being trustworthy”: 10 pounds at 4,000 pesos.
“Chicken cannot have disappeared from the face of the earth; it’s here in Cuba, but they hide it because they don’t want to sell it at the prices dictated by the State,” explained another Cuban, a resident of Central Havana. “It’s always the same: they capped the price of taxis, the taxis disappeared; they capped the price of malanga and the malanga disappeared. Well, now chicken has disappeared.”
Meanwhile, in the State stores selling in freely convertible currency (MLC), there were not only the lost products in that had been sold in pesos, but they were much more expensive. In La Época, in Central Havana, detergent of 1.5 kilos was at 5.45 dollars (1,908 pesos at the informal exchange rate), and 1.25 kilos of Argentine chicken was at 6.55 dollars (2,293 pesos).
“They’re never going to cap themselves, as you can imagine,” said a client at the doors of the MLC store.
The effort to attack the MSMEs (micro, small and medium-sized enterprise) by imposing a profit cap on them has been criticized by specialists such as Pedro Monreal, who insists that the way to contain inflation, which has not stopped growing exponentially since the entry into force of the so-called Ordering Task* (2021), is none other than the reduction of expenses.
The economist has again published a revealing post on Tuesday, based on figures published yesterday by the National Bureau of Statistics and Information (Onei) that indicate the spectacular increase in the weight of the “non-state sector” in retail sales. In four years, as observed in an official graph, private sector sales have gone from 4.1% of the total to 44.4%, while state sales went from 95.9% to 55.6%.
It remains to be seen whether prices will be discussed on State TV’s Round Table program scheduled for this Tuesday, to which “leaders of the Communist Party” are invited to “analyze partisan actions based on boosting food production in the country.” Cubans know what the end of the film is: a shortage of products and more difficulties to obtain them.
*Translator’s note: The Ordering Task was a collection of measures that included eliminating the Cuban Convertible Peso (CUC), leaving the Cuban peso (CUP) as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency, which must be in the form of specially issued pre-paid debit cards, and a broad range of other measures targeted to different elements of the Cuban economy.
Translated by Regina Anavy
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