Sugar shortage in Venezuela hits production of Coca Cola

Coca Cola production has been halted in Venezuela, due to a lack of sugar. The country is expected to produce 430,000 tonnes of sugar cane in 2016/17, down from 450,000 tonnes the previous year. Several factors have contributed to a fall in production in recent years, including rising production costs, price controls and a lack of foreign exchange. Kerry Tressler, Coca Cola spokeswoman, said, “Sugar suppliers in Venezuela have informed us that they will temporarily cease operations due to a lack of raw materials. We are engaging with suppliers, government authorities and our associates to take the necessary actions for a prompt solution”. Ford, Kraft Heinz, and Proctor & Gamble have also reduced or suspended production in the country, which is in the midst of an economic crisis.

Venezuela has halted production of Coca Cola due to a lack of sugar.

It is the latest sweeping measure to hit the Latin American country amid a crippling recession and the world's highest inflation due to plummeting oil prices.

Electricity, medical supplies, toilet paper and food are just a few of the crucial items now being rationed.

Now, it is sweetened soda, a Coca-Cola Co spokeswoman said on Monday.

Scroll down for video

The real thing: Sugar-sweetened Coca Cola will no longer be available in Venezuela due to a sugar shortage

For now, Coca Cola Light and other zero-sugar beverages will still be available.

Sugar cane production has declined dramatically in Venezuela over the past few years due to a number of factors including price controls, rising production costs, lack of fertilizer, and lack of foreign exchange.

The country is expected to produce 430,000 tonnes in 2016/17, down from 450,000 tonnes the previous year.

But to cater for the number of products that rely on sugar, the industry will also have to import 850,000 tonnes of raw and refined sugar, according to the USDA.

'Sugar suppliers in Venezuela have informed us that they will temporarily cease operations due to a lack of raw materials,' Coca Cola spokeswoman Kerry Tressler said on Monday.

'We are engaging with suppliers, government authorities and our associates to take the necessary actions for a prompt solution,' she added.

Venezuela also owes Coca Cola a not-insignificant amount in debt.

Coca Cola is not the first international firm to be hit by Venezuela's cutbacks.

Coca Cola is not the first international firm to be hit by Venezuela's cutbacks amid a crippling recession

Ford, Kraft Heinz Co., Proctor & Gamble, and Clorox Co. have slowed or suspended production in the country.

It comes as no surprise: as the country flounders in an economic crisis, the government is prioritizing international debt over commercial debt.

President Nicolas Maduro has made almost no changes to the country's economic policies since assuming office two years ago before the crisis hit.

However, the country fell victim to recessions as it relied overwhelmingly on oil - which accounts for 95 per cent of the country's foreign exchange earnings.

The economy shrank 5.7 per cent last year after a sudden drop in oil prices.

Its inflation has now climbed to more than 500 per cent, the highest in the world.