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OO RUEHWEB

DE RUEHTG #0975/01 2682317
ZNR UUUUU ZZH
O 252317Z SEP 09
FM AMEMBASSY TEGUCIGALPA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0757
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE IMMEDIATE
RUEAHND/CDR JTF-BRAVO  IMMEDIATE
RUEAIIA/CIA WASHDC IMMEDIATE
RUEHRC/DEPT OF AGRICULTURE USD WASHDC IMMEDIATE
RUCPDOC/DEPT OF COMMERCE WASHDC IMMEDIATE
RHEBAAA/DEPT OF ENERGY WASHDC IMMEDIATE
RHEFDIA/DIA WASHINGTON DC IMMEDIATE
RUEIDN/DNI WASHINGTON DC IMMEDIATE
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC IMMEDIATE
RUMIAAA/USSOUTHCOM MIAMI FL IMMEDIATE

UNCLAS TEGUCIGALPA 000975 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EAID ETRD EAGR ELTN PINS PGOV SOCI KDEM
HO 
SUBJECT: TFHO1: STOCKS OF STAPLES STILL SUFFICIENT 
 
¶1.  (U) Summary: The de facto regime temporarily suspended 
the nationwide curfew during the day on Wednesday, September 
23 to allow Hondurans to stock up on food, fuel and cash; the 
curfew was lifted for most of the day on September 24.  On 
September 23,  thousands of people rushed to stores, banks, 
and gas stations to stock up on supplies, often forming long 
lines outside businesses.  Atypical demand brought on by the 
curfew reprieve did exhaust resources at some gas stations. 
The de facto Secretary of Industry and Commerce publicly 
assured that there is ample supply of fuel.  Management from 
three major supermarket chains said that stores were well 
supplied and distributors were also able make deliveries 
during the break in the curfew.  Although there were no 
reports of widespread shortages at major supermarkets or 
significant violence related to these shopping sprees, 
retailers have security concerns.  During the early morning 
hours of September 23, looters ransacked several stores in 
Tegucigalpa.  By September 24, businesses were striving to 
return to normal operations, in spite of curfews and 
protests.  End Summary. 
 
------------------------ 
Shopping Between Curfews 
------------------------ 
 
¶2.  (U) Since the September 21 return of deposed president 
Manuel Zelaya, the de facto regime imposed a curfew to limit 
opposition, mitigate violence and maintain order.  In the 
early morning hours of September 23, an announcement sent 
over TV and radio airways indicated that the curfew would be 
lifted from 1000 until 1700 local time (1300 to 2000 EST). 
The reprieve was designed to allow Hondurans to stock up on 
food, fuel and cash.  Throughout the country, thousands of 
people rushed to stores, banks, and gas stations to stock up 
on supplies, often forming long lines outside businesses. 
Shoppers and employees alike hurried to take care of their 
errands in crowded businesses and snarled traffic and return 
home before resumption of the curfew.  There were no reports 
of widespread shortages at major supermarkets or significant 
violence related to these shopping sprees. 
 
¶3.  (SBU) Sales figures were not immediately available from 
major supermarket chains, although Leonel Giannini, the 
president of La Colonia, a Honduran chain with 16 stores, 
conjectured to EconOff that sales in those few hours may 
likely be only slightly higher than the sales they would have 
made during the time they were forced to be closed. 
 
------------------- 
Enough To Go Around 
------------------- 
 
¶4.  (U) The de facto Honduran Secretary of Industry and 
Commerce, Benjamin Bogran, held a midday national press 
conference to urge calm and assure Hondurans that there is 
ample supply of fuel.  Bogran highlighted the deployment of a 
petroleum tanker to the northern port town of Tela nearly two 
hours after the curfew was lifted. 
 
¶5.  (SBU) Local contacts confirmed Bogran,s assertion 
regarding a one month fuel supply in the southern town of San 
Lorenzo.  Atypical demand brought on by the curfew reprieve 
did exhaust resources at some gas stations.  Daniel Mencia, 
Country Operations Manager at ExxonMobil, reported to EconOff 
that reports of dry gas stations were limited and occurred 
primarily in rural areas where distribution is an issue even 
under normal political conditions.  C. Mauricio Sierra, 
General Manager of Shell, Honduras told EconOff that 
combustible stocks in the country should suffice for 15 to 20 
days in the event of further border or port closures. 
Distribution and consumer demand is expected to stabilize in 
one to two days. 
 
¶6.  (SBU) Bogran guaranteed Hondurans that supermarkets 
throughout Tegucigalpa are stocked with 14 days worth of 
foodstuffs.  He also stressed adequate grain reserves, which 
corresponds with newspaper reports that Honduras has 
strategic grain reserves to last until August 2010. 
 
¶7.  (SBU) Management from three major supermarket chains, La 
Colonia, PriceSmart (a Costco affiliate, with headquarters in 
San Diego and 26 stores in Central America and the 
Carribean), and Wal-Mart Central America (operating as 
HiperPaiz, Supermercado Paiz, Maxi Bodegas, and Despensas 
Familiares), informed EconOff that stores were well supplied, 
and that distributors were also able make deliveries during 
the break in the curfew.  EmbOffs visited supermarkets near 
the Embassy on September 24 and found shelves well-stocked 
and little sign of the mob scenes from the previous day.  A 
local Paiz supermarket, which the El Heraldo newspaper 
featured with photos during the height of shopping, was 
re-stocked and orderly, with only fresh milk and meat in 
shorter supply.  While retail outlets strived to continue 
normal operations on September 24, they were still forced to 
adapt their hours for curfews.  The curfew on Thursday, 
September 24 resumed at 19:00 and continued until 05:00 on 
Friday.  Tensions remain high for managers, employees, and 
customers as protesters march daily. 
 
¶8.  (SBU) While Mey Hung, Corporate Affairs Manager for 
Wal-Mart, reported that the Ministry of Security allowed safe 
passage of their trucks during the curfew, Chris Souhrada, 
Senior VP of Operations for PriceSmart, lamented that the 
curfews, blockades, and border closures have had a serious 
negative impact on their business because of their dependence 
on imports and a variety of distributors.  (Note: 
approximately 50% of merchandise available at PriceSmart is 
imported from the U.S.  End Note.)  He further conveyed that 
the general uncertainty and unrest not only affect the supply 
chain and increase costs for additional security, they also 
bring down the morale of employees and willingness of 
customers to shop.  Borders have since re-opened, allowing 
shipments to and from El Salvador, Guatemala and Nicaragua. 
 
¶9.  (U) Small family-run shops (called pulperias) have had 
mixed results during the most recent political turmoil. 
EconOff spoke with the owner of a roadside stand who said he 
has done some of his best business during the curfew because 
he stayed open, when larger stores closed.  This shop owner 
also explained that he controls his inventory by buying in 
bulk at the open air market.  Other shop owners who depend on 
deliveries or traveling salespeople have found the curfew 
more disruptive. 
 
------------------------- 
Unrest Turns Into Looting 
------------------------- 
 
¶10.  (SBU) Security concerns do exist.  During a 
demonstration in defiance of the curfew in the early morning 
hours Tuesday, September 22, a group of vandals overpowered a 
guard and broke into a shopping center in a Tegucigalpa 
neighborhood.  During the early morning hours, looters 
ransacked a La Colonia supermarket, an Elektra appliance 
store, a Despensa Familiar supermarket, a branch of Banco 
Azteca, and several ATM machines.  Management of La Colonia 
and Wal-Mart were not able to provide a dollar figure on the 
losses, but described the destruction as near total.  In 
addition to emptying the shelves of products, the looters 
also stole the cash registers, computers, and office 
equipment, and smashed refrigerator cases that weren't even 
locked.  La Colonia estimates it will take 45 to 60 days to 
restore their store, while Wal-Mart hopes to have the 
Despensa Familiar back in business in about a week. 
 
¶11.  (U) Police have raided houses of suspected looters and 
confiscated stolen goods, presumably identified by store tags 
and the shopping carts still full of swag.  (Note: the 
conservative newspaper El Heraldo points to "Zelayistas" as 
the culprits, although there is no evidence of political 
motivation or affiliation among the looters.) 
LLORENS