Venezuelan Daily Brief

Published in association with The DVA Group and The Selinger Group, the Venezuelan Daily Brief provides bi-weekly summaries of key news items affecting bulk commodities and the general business environment in Venezuela.

Friday, March 6, 2015

March 06, 2015


International Trade

 

Cargo that has arrived at Puerto Cabello:

  • Over 33,000 tons of corn from Alimentos y Forrajes S.A. for state agency Corporación de Abastecimiento y Servicios Agrícolas (CASA)
  • Around 8,000 tons of foods in 293 containers bearing milk, coffee, beef, cooking oil and beans for CASA and Café Venezuela state agencies.
  • 816 tons of processed corn for Easy Freight C.A.
  • Over 410 tons in 43 containers bearing electric appliances such as refrigerators and washing machines from China for Lilly & Associates.
  • Over 211 tons in 17 containers bearing toothpaste and sanitary napkins from Procter & Gamble Mexico for its Venezuelan affiliate.
  • 167 tons of wood planking for the Socialist Cement Corporation.
  • Over 110 tons in 11 vans of household appliances from Panama for Logística Multimodal (Logimodal).
  • Over 81 tons of sodium percarbonate from Evonik Treibacher Persalze for Procter & Gamble
  • Over 36 tons Toyota vehicles from Curiel International Logistics and Lilly Associates International for subsidiaries in Venezuela.
  • Shampoo, conditioner, mouthwash, disposable diapers, sanitary napkins and detergents for Procter&Gamble. 
  • A container with disposable razors for the Venezuelan Foreign Trade Corporation.
  • Several containers bearing spare parts for Ford Venezuela. 
  • 8 vans with complete equipment for processing traditional condensed milk, for Taurel & Company.
More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Luego-de-mas-de-dos-meses-en-bahia-finalmente-atraco-el-buque-Alentejo-2362091/2015/03/04/493262/; http://www.notitarde.com/La-Costa/Llegaron-mas-de-200-toneladas-de-articulos-de-aseo-2361837/2015/03/03/493023/; El Nacional; http://www.el-nacional.com/)

 

 

Logistics & Transport

 

Port workers collective bargaining talks suspended...and workers paralyze terminal at Puerto Cabello

Karina Ordoñez, Secretary General of the Socialist Workers Union at Puerto Cabello, reports collective bargaining talks  were suspended with no new date in sight as terms were sent to the National Inspector's office in Caracas. Workers at the terminal spontaneously paralyzed activities for 5 hours as a protest against the decision. More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Suspendida-discusion-de-contrato-colectivo-portuario-2361426/2015/03/03/493014/; http://www.notitarde.com/La-Costa/Terminal-maritimo-de-Puerto-Cabello-paralizado-por-5-horas-2362047/2015/03/04/493257/

 

AVIANCA is cutting ticket sales in local currency "to the bare minimum"

Gerardo Grajales, Financial Director for AVIANCA Holdings, reports they are limiting ticket sales in local currency in Venezuela since exchange controls do not allow them to repatriate around US$ 300 million. He says AVIANCA has been cutting seats since last August and will cut sales in bolivars "to the bare minimum". More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/avianca-recortara-sus-ventas-de-boletos-en-bolivar.aspx#ixzz3Tb71GrCb; El Nacional, http://www.el-nacional.com/economia/Avianca-Venta-bolivares-funcionarios-gobierno_0_586141479.html)

 

IBERIA reports that it has 200 million Euros blocked in Venezuela

IBERIA President Luis Gallego says his company has 200 million Euros is has not been able to repatriate from Venezuela. He says they intend to continue operations here but are adjusting offers to demand. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

 

Oil & Energy

 

Guyana says Exxon to begin offshore drilling, Venezuela irked

Exxon Mobil is starting exploration drilling at the large Stabroek Block off the coast of Guyana, the government said, in a move that could inflame a long-running territorial row with Venezuela. "They are doing the preparatory work, and actual drilling is expected to commence tomorrow (Friday) morning," says Guyana's Natural Resources Minister Robert Persaud. Guyanese officials said President Donald Ramotar met Exxon Mobil officials in Georgetown this week and the company's exploration rig ship, Deepwater Champion, was now in position at the concession area. (Reuters, http://www.reuters.com/article/2015/03/05/guyana-exxon-mobil-idUSL1N0W72RE20150305; El Universal, http://www.eluniversal.com/nacional-y-politica/150305/venezuela-rejects-guyanas-protest-over-exxon-oil-prospecting)

 

Venezuela loses bid to reduce interest on Exxon arbitration award

A New York district court has rejected Venezuela's bid to reduce interest on a US$ 1.6 billion award that an international tribunal had ordered it to pay Exxon Mobil Corp in compensation for nationalizations. The decision is a setback for the government that has also sought revisions to the International Center for Settlement of Investment Disputes' (ICSID) decision, in addition to its outright annulment. "The judgment shall continue to accrue interest at the rate that the ICSID award specified: 3.25% compounded annually, until Venezuela has made payment in full," District Judge Paul A. Engelmayer ordered, denying Venezuela's motion. (Reuters, http://www.reuters.com/article/2015/03/04/venezuela-exxon-idUSL1N0W621E20150304)

 

Uruguay may pay for Venezuelan oil with goods and services

Venezuela will allow Uruguay to pay for part of the oil it supplies with goods and services, through a 2005 cooperation agreement, according to a supplemental amendment signed in January by the presidents of both nations in order to make the agreement more flexible. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/uruguay-podra-pagar-con-bienes-y-servicios-parte-d.aspx#ixzz3TPRoj300; El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/uruguay-podra-pagar-con-bienes-y-servicios-parte-d.aspx; El Nacional; http://www.el-nacional.com/)

 

 

Commodities

 

The government owes the food industry US$ 805 million

 Pablo Baraybar, President of the Food Industry Chamber (CAVIDEA), reports the government has not yet disbursed US$ 805 million it still owes the food industry for payments to international suppliers. "The delay is 195 days and this is what is needed to transfer to suppliers, the industries do not physically receive a single dollar". He estimates that in order to correct the situation"60% of the FOREX now used to import food should be directed to importing staples and intermediate goods for domestic production". More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/-805-millones-adeuda-el-gobierno-a-la-industria-de.aspx#ixzz3Tb1AIOFv; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/805-millones-de-dolares-adeuda-el-gobierno-a-la-in.aspx; El Nacional, http://www.el-nacional.com/economia/Produccion-alimentos-caido-ano_0_586141582.html, http://www.el-nacional.com/economia/Cavidea-Dolar-Simadi-impactara-alimentos_0_586141475.html)

 

 

Economy & Finance

 

FEDECÁMARAS reports new FOREX system doesn't work, Central Bank is now allocating currency directly

FEDECAMARAS, Venezuela's principal business federation says the new FOREX system is "not benefitting" the economy and is "accelerating the crisis" in inventories. FEDECAMARAS Vice President Francisco Martínez says "we do not yet have a really reliable, transparent and free flowing system for acquiring FOREX needed for buying intermediate goods and staples for producing in Venezuela"...."this accelerates the crisis in inventories...and is reflected on the shelves". SIMADI’s poor design and the lack of dollar offers is raising alarm and forcing the parallel dollar or black market dollar skyrocket. Software-related problems allegedly have prevented smooth operation of the Exchange Marginal System (SIMADI), thus causing delays in transactions. In the meantime, the Central Bank cancelled a previously scheduled FOREX tender for banks and exchange houses and instead has begun allocating FOREX "according to needs".  (VENECONOMY, http://www.veneconomy.com/site/index.asp?ids=44&idt=42996&idc=2; El Universal, http://www.eluniversal.com/economia/150305/interconnection-flaws-cause-delays-in-venezuelan-forex-system; and more in Spanish: El Mundo, http://www.elmundo.com.ve/noticias/economia/gremios/fedecamaras-denuncia-mal-funcionamiento-de-nuevo-s.aspx#ixzz3Tb1YvEKY; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/extraoficial---bcv-suspende-subasta-de-divisas.aspx#ixzz3Tb32ijo4; El Universal, http://www.eluniversal.com/economia/150306/bcv-suspende-subasta-de-dolares-para-el-menudeo; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/fedecamaras-denuncia-mal-funcionamiento-de-simadi.aspx; El Nacional, http://www.el-nacional.com/economia/Fedecamaras-critico-funcionamiento-sistema-cambiario_0_586141501.html; http://www.el-nacional.com/economia/Suspenden-subasta-asignaran-directo-operadores_0_586141603.html)

 

Black market rate weakens below 250 bolivars per dollar

Venezuela's black market exchange rate has weakened below 250 bolivars per dollar as a new foreign exchange platform struggles to satiate avid demand for dollars. The bolivar has weakened 32% since the start of the year to fall to 255.43, according to website DolarToday, which says it publishes the black market rate based mostly on currency trades along the Colombian border. (Reuters, http://www.reuters.com/article/2015/03/04/venezuela-forex-idUSL1N0W62E020150304)

 

A significant sale operation of gold from the Venezuelan Central Bank (BCV) reserves would take place very soon, according to journalist Nelson Bocaranda. The BCV’s board of directors is reportedly set to approve the sale of 1,400 Troy ounces, via the Deutsche Bank, Bank of America and Citibank, with around US$ 500 million from each bank, according to Bocaranda. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42998&idc=2)

 

Venezuela as risky for investors as Afghanistan, Iran or Iraq

British risk advisors AON list Venezuela at the same risk level for investors as Afghanistan, Iran or Iraq. The company says Venezuela presents "high risks" in all economic areas, along with "particularly important problems in the legal, regulatory and foreign exchange areas". More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Venezuela-invertir-Afganistan-Iran-Iraq_0_586141405.html)

 

 

Politics and International Affairs

 

Jailed opponents to be nominated to legislature, Prosecutor General claims López is barred

Jesús Torrealba, Secretary General of the opposition Democratic Unity Conference (MUD) says the three key jailed leaders, Caracas Mayor Antonio Ledezma, Voluntad Popular's Leopoldo López, and former San Cristóbal Mayor Daniel Ceballos, have agreed to be nominated to the National Assembly. The date for parliamentary elections has yet to be set. Torrealba added that if they are elected "by the sovereign people....if this should happen, if the people's decision is to take these three leaders out of jail, I do not see how the government can prevent it." Prosecutor General Luisa Ortega swiftly replied that Leopoldo López cannot run in the legislative elections because he has been banned from public office until 2017. She explained that “it is not that the candidacy is null, it’s he cannot be nominated.” López was banned from public office by the Comptroller General’s Office in 2008, in two consecutive “rulings” for six years and for three years. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43000&idc=1; and more in Spanish: Infolatam, http://www.infolatam.com/2015/03/04/opositores-presos-ledezma-lopez-y-ceballos-seran-candidatos-parlamentarias/)

 

Maduro terms "stupid" speculation over leftist coup d'état

President Nicolás Maduro labeled news agency Efe as "stupid" following analyses and reports regarding the possibility of a coup d'état perpetrated by the government itself in order to put off the upcoming parliament vote, due to chavismo's declining popularity. "Coup perpetrators have reported that I am going to launch a coup. How Machiavellian is that! Those leading the Efe agency are stupid people who hate us," Maduro said during a rally in downtown Caracas to commemorate the second anniversary of the death of former President Hugo Chávez. (El Universal, http://www.eluniversal.com/nacional-y-politica/150305/maduro-terms-stupid-speculation-over-leftist-coup-detat)

 

US pushes back on Venezuela’s order to slash embassy staff

The United States has pushed back against Venezuela’s demand for a dramatic cut in the American diplomatic mission in Caracas.  State Department spokeswoman Marie Harf says the U.S. noted that Venezuela was wrong about the number of diplomats it has working in the U.S. “The numbers the Venezuelan government has offered regarding the size of its mission in the United States dramatically understates the number of Venezuelan diplomats,” she said.  Venezuela has 74 officials accredited by the US State Department, at its Embassy in Washington DC and 8 consulates - not 17 as Maduro announced. Harf said no American diplomats had been ordered to leave Venezuela. The U.S. was only ordered to submit a plan within 15 days on how it would reduce staffing at the embassy in Caracas and would respond “after due consideration of their request,” she said. Venezuela published also regulations removing the U.S. from a list of countries whose citizens can travel here without obtaining a visa. US citizens must now pay US$ 30 to receive a one year multiple entry visa for a total 90 days in Venezuela, applications must be made 90 days before the travel date. The same official notice also formally banned entry by a list of conservative U.S. politicians, including former President George W. Bush, former Vice President Dick Cheney and Republican Sen. Marco Rubio of Florida. (The Washington Post: http://www.washingtonpost.com/world/the_americas/us-pushes-back-on-venezuelas-order-to-slash-embassy-staff/; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2377057&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/150305/us-to-respond-to-venezuelas-measures-via-diplomatic-channels); and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/150306/estadounidenses-deben-pagar-30-por-la-visa-de-turista; http://www.eluniversal.com/nacional-y-politica/150306/gobierno-de-venezuela-tiene-74-diplomaticos-en-eeuu)

 

UNASUR confirms visit by secretary general and foreign ministers

The Union of South American Nations (UNASUR) has confirmed that a delegation of Unasur foreign ministers and Secretary General Ernesto Samper are meeting here with President Nicolás Maduro "to examine the situation in the country," and foster "rapprochement and dialogue with other political and social actors". (El Universal, http://www.eluniversal.com/nacional-y-politica/150305/unasur-confirms-visit-of-secretary-general-and-foreign-ministers-to-ca)

 

Inter American Human Rights Commission asks regime to avoid "excessive use of force"

The Inter American Human Rights Commission has asked the Venezuelan regime to take steps to avoid the "excessive use of force" at demonstrations and has expressed regret at the death of a 14 year old high school student during protests in San Cristóbal. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150304/cidh-solicito-medidas-para-evitar-uso-excesivo-de-fuerza; El Nacional; http://www.el-nacional.com/)

 

Venezuela urges Guyana to reopen border dispute negotiations

The Venezuelan government has urged Guyana to reopen bilateral "negotiation" mechanisms to address a border dispute between both countries as soon as possible. The Venezuelan Foreign Office pointed out that discussions should be conducted "with no reservations or misunderstandings, in a peaceful, legitimate, and lawful manner, through the United Nations Secretary General Good Officer Process as an optimal and convenient methodology to undertake bilateral and friendly negotiations without the annoying interference of foreign factors, in order to reach a practical and satisfactory solution for both parties." (El Universal, http://www.eluniversal.com/nacional-y-politica/150305/venezuela-urges-guyana-to-reopen-border-dispute-negotiations)

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

Tuesday, March 3, 2015

March 03, 2015


International Trade

 

Over 7,000 tons of food have arrived at Puerto Cabello

Over 7,000 tons in 293 containers bearing milk, coffee, beef, cooking oil and beans, from Centrolac; Colmenitas S.A.; Eskimo S.A.; Productos Lácteos La Perfecta; Alba Alimentos Nicaragua; Panamericana S.A., JBS S/A; Dalian Jai Sunny Trade; and Industria Comercial San Martín, arrived at Puerto Cabello for state agencies CASA and CAFÉ VENEZUELA. More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-7-mil-toneladas-de-alimentos-llegaron-al-puerto-2360426/2015/03/02/492807/)

 

As Venezuela coffee output sinks, it swaps oil to import Nicaraguan beans

Venezuela, once a proud exporter of premium coffee, has been reduced to swapping crude oil for growing volumes of Nicaraguan coffee beans to make sure worsening economic turmoil does not prevent people from getting their caffeine fix. For the first time on record, coffee imports this year will exceed the bean output of Venezuela's centuries-old coffee industry, according to U.S. government estimates. The country's shift from net coffee exporter to substantial importer has altered flows in regional markets, boosting prices for some varieties of coffee. It is also another sign of how the collapse in crude oil prices, and resulting pressures on an already deeply troubled Venezuelan economy, has forced the government to take extraordinary measures to keep supermarket shelves stocked with basic goods. (Reuters, http://www.reuters.com/article/2015/03/02/venezuela-nicaragua-coffee-insight-graph-idUSL1N0W20RV20150302)

 

 

Oil & Energy

 

Schlumberger-Pdvsa to strengthen cooperation

Eulogio del Pino, President of state-run oil holding Petróleos de Venezuela (PDVSA), and Paal Kibsgaard, CEO of Schlumberger, French leading supplier of services to the oil and gas industry, have met to assess the execution of joint plans and cooperation among both companies. Del Pino said he was pleased with the progress cooperation among both companies and welcomed Schlumberger s will to increase the amount of the existent facility extended to PDVSA. (El Universal, http://www.eluniversal.com/economia/150302/schlumberger-pdvsa-to-strengthen-cooperation)

 

 

Economy & Finance

 

Betting on Simadi to crush the parallel exchange rate

He is 40 years old and claims that half of them have been spent in the stock market. Ricardo IV Montilla, president of the Venezuelan National Association of Securities Brokers is positive that he, as an entrepreneur, will not leave Venezuela. He is certain that in the advent of the Foreign Exchange Marginal System (Simadi), the days of the parallel exchange or black market, operating in ghost websites, are numbered.

He asks for calm. He speaks of a secured technology platform that will back the foreign exchange marginal system. This new and third system will operate as a complement to the National Center for Foreign Trade (Cencoex) (USD 6.30 per US dollar for food and medicines), and the Ancillary Foreign Currency Administration System (Sicad) (from USD 12 per US dollar for the rest of the economy, including a quota for students abroad and foreign travel, among others). He promises that it is just a question of waiting for the publication in the Official Gazette of the two remaining exchange agreements, which will determine all the rate codes of the items included in the first and second systems. (El Universal, http://www.eluniversal.com/economia/150228/betting-on-simadi-to-crush-the-parallel-exchange-rate)

 

 

Politics and International Affairs

 

Maduro announces diplomatic sanctions against US

In a further deterioration of diplomatic ties between Venezuela and the US, President Nicolás Maduro has announced the number of US diplomats allowed to work in the country must be reduced from 100 to 17 within 15 days, and will impose mandatory visas for Americans travelling to the socialist nation. Under the new measures, Venezuela will start charging tourists the same visa fees the US asks of Venezuelans, though it was unclear when the plan would be implemented. But the restrictions could also have an impact on business travelers seeking to invest in one of the biggest oil producers. Maduro also said that any meetings between US diplomats and Venezuelans would have to be “authorized” by the Venezuelan government. He spoke after the capture of an American pilot of Latin American descent in the state of Táchira, in western Venezuela. He said the pilot, whom he did not identify, was suspected of spying – though he did not provide details. Maduro has accused the US of working with groups critical of his government to plot a coup against him, charges Washington has denied. In addition, Maduro named US politicians who would be barred from entering the country. The list included former President George W Bush and former Vice President Dick Cheney, as well as Hispanic American politicians Bob Menendez, Ileana Ros-Lehtinen and Marco Rubio, and former CIA director George Tenet. “We will prohibit visas for individuals who want to come to Venezuela who have violated human rights and have bombed Iraq, Syria and Vietnam,” said Maduro. The move was made in retaliation for targeted sanctions imposed by the US against Venezuelan officials and their immediate family members who are deemed responsible for human rights abuses and corruption. The sanctions include denying visas and freezing US-held bank accounts. Carlos Romero, an international relations analyst in Caracas, said the measures announced by Maduro were extreme and would likely bring some sort of reciprocal measure from the US. “We are entering a new phase of already deteriorating relations that is much more negative,” he said, warning that the next step may be a severing of diplomatic ties altogether. “This is going to snowball,” Romero predicted. The announcement of the diplomatic sanctions came on the same day that four American missionaries who were detained for questioning earlier in the week were released and headed home. Venezuela summoned the U.S. charge d'affaires for a meeting with its foreign minister and others, State Department spokeswoman Marie Harf told reporters, adding that she had no other details. (The Guardian, http://www.theguardian.com/world/2015/feb/28/venezuela-president-nicolas-maduro-diplomatic-sanctions-us;  Reuters, http://www.reuters.com/article/2015/03/02/us-venezuela-usa-idUSKBN0LY29220150302; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2376238&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/150302/venezuelan-govt-to-request-visa-from-us-citizens; BBC News, http://www.bbc.com/news/world-latin-america-31679888; Reuters, http://www.reuters.com/article/2015/03/02/us-venezuela-usa-idUSKBN0LY26P20150302; Chicago Tribune, http://www.chicagotribune.com/news/sns-wp-blm-news-bc-venezuela02-20150202-story.html; Al Jazeera, http://www.aljazeera.com/news/2015/03/150301030807010.html)

 

Empty shelves and coup plots in Venezuela

Venezuela is in a bad state. The country’s economy is forecast to contract 7% this year. Shortages of basic foodstuffs are mounting. Soap and diapers have become luxury items. Crime rates are soaring as poverty rises. So it’s little surprise that polls show that the ruling party can expect a drubbing in congressional elections that are expected to be held later this year. President Nicolás Maduro is in a bind. What can he possibly do? The answer, it seems, is an easy one: trot out a conspiracy. Maduro scathingly attacked his domestic opponents, but he saved his most biting criticisms for the United States, which he said was coordinating efforts to overthrow his regime. Maduro said U.S. diplomats in Caracas were “continuing to call military officers, trying to buy journalists, columnists, and leaders.” “Nobody messes with Venezuela,” Maduro said: “Respect Venezuela, you fucking Yankees. Respect our country. Enough is enough.” The U.S. State Department denied all of Maduro’s charges. Instead, Washington, Amnesty International, the Organization of American States, and even Brazil, a sometimes ally to Caracas, expressed concern about the deteriorating political situation and called for dialogue between Maduro and his opponents. (Foreign Policy, http://foreignpolicy.com/2015/02/27/empty-shelves-and-coup-plots-in-venezuela-maduro/)

 

Carl Meacham: Venezuela’s desperate times and Nicolás Maduro’s desperate measures

Over the weekend, President Maduro announced a series of new measures supposedly designed to counter U.S. influence in Venezuela. All of this bluster and bombast amounts to this: desperate moves from an administration desperate to distract from Venezuela’s desperate political and economic straits. Venezuela—and particularly the government of Nicolás Maduro—is in crisis and the worst could be yet to come. It speaks to his sense of panic: panic over his country’s economic disaster, panic over his unpopularity, and panic over the faltering of Chavismo in a country so wedded to it. The recent arrests of Americans in Venezuela, Maduro’s anti-U.S. speeches, empty rhetoric, and accusations of espionage, sabotage, and collusion—all of this is no more than an attempt at distraction by a floundering leader desperate for his own preservation. (CSIS, http://csis.org/publication/venezuelas-desperate-times-and-nicolas-maduros-desperate-measures)

 

Opposition accuses Maduro of inventing coup attempts to justify repression

Opposition leaders in Venezuela again said President Maduro "invented" a coup attempt he says he prevented last month. Former Presidential candidate Henrique Capriles says his rhetoric aims at distracting attention from economic problems. Capriles says Maduro and officials in his regime "feed violence through speech that disqualifies, offends and tries to distract attention from food and medicine scarcity, from inflation, and the high cost of living....Do not pretend to be victims or come up with the tale that you are being threatened. Venezuelans already know who is who." Baruta municipal mayor Gerardo Blyde says Maduro and his people "need a permanent scandal...to hide a reality of lines and scarcity...thus this alleged coup they have invented." Blyde points to a statement by former Uruguayan president José Mujica who said Maduro could be the object of a coup, but by left wing military officers. More in Spanish: (Infolatam, http://www.infolatam.com/2015/03/01/oposicion-acusa-maduro-de-inventar-golpes-de-estado-para-justificar-represion/)

 

Pope urges rejection of violence, reopening of dialogue in Venezuela

Pope Francis has urged all parties to reject violence in Venezuela, noting that the country “is once again experiencing moments of acute tension,” and encouraged the reopening of a “sincere and constructive” dialogue to resolve differences. “I want to recall Venezuela, which is once again experiencing moments of acute tension. I pray for the victims and – in particular – for the boy (killed) a few days ago in San Cristobal,” said Francis after his Sunday Angelus prayer. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2376292&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/150302/pope-francis-urges-venezuela-to-end-violence-and-resume-talks)

 

Colombia's Santos: alleged plot against Maduro "makes no sense"

The President of Colombia, Juan Manuel Santos says he usually talks to his Venezuelan counterpart, Nicolás Maduro to settle disagreements "with caution and respect." Santos said that the idea of an alleged plot to topple Maduro s government involving Colombia "makes no sense". (El Universal, http://www.eluniversal.com/nacional-y-politica/150302/colombias-santos-alleged-plot-against-maduro-makes-no-sense)

 

Perú also supports dialogue in Venezuela

Peruvian President Ollanta Humala has repeated his support for dialogue in order to solve Venezuela's domestic crisis and believes that any problem here "will impact all of the Latin American region". More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150303/peru-apoya-dialogo-para-asegurar-la-paz-en-america-latina)

 

3,400 Venezuelans at risk of deportation from the United States

In the last couple of years through last January, 3,389 Venezuelans have been delivered from deportation following a decision by US President Barack Obama. Now, the move is at stake. Beneficiaries of the Deferred Action for Childhood Arrivals (DACA) are undocumented immigrants eligible for a temporary work permit and exempted from deportation for a period of three years. Now, however, the project intended to save about four million illegal aliens in the United States is deadlocked. Recently, a court of Texas temporarily blocked the extension of DACA scheduled to start last February 18. For the White House, such situation should be resolved promptly in order to prevent deportation of 230,000 young immigrants who grew up in the United States, including thousand Venezuelans. (El Universal, http://www.eluniversal.com/nacional-y-politica/150228/3400-venezuelans-at-risk-of-deportation-from-the-united-states)

 

Venezuela, Lebanon strike cooperation deals

Venezuelan and Lebanese Foreign Ministers Delcy Rodríguez and Gebran Bassil, respectively, signed cooperation agreements on economy, politics, society and culture, which makes both countries "step forward towards the consolidation of a new international peaceful cooperation policy."(El Universal, http://www.eluniversal.com/nacional-y-politica/150302/venezuela-lebanon-strike-cooperation-deals)

 

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

 

Friday, February 27, 2015

February 27, 2015


International Trade

 

Cargo that has arrived at Puerto Cabello

  • 32,749 tons of rice from Louisiana, for state agency CASA.
  • 33,000 tons of corn from Argentina, also for state agency CASA.
  • Over 32,000 tons of paddy rice from TRC Trading Corporation for CASA
  • 3,800 tons in 161 containers bearing milk, coffee, beef and cooking oil from Caribbean Liquid Sugar RHJ, Centrolac, Colmenitas S.A., Eskimo S.A., Productos Lácteos La Perfecta, Alba Alimentos de Nicaragua, and Comercial San Martín, for Casa & Café Venezuela.
  • Over 669 tons of doors and bathrooms from Postar for Servicio Fondo Nacional del Poder Popular (Safonapp).
  • Over 150 tons of baby formula milk from México to Nestlé Venezuela.
  • Also vehicle parts, and personal care prodcts from Ford Motor and Procter & Gamble for their local affiliates.
More in Spanish: (Notitarde, http://www.notitarde.com/La-Costa/Luego-de-casi-tres-meses-atraco-el-buque-Pomorze-2355467/2015/02/24/491755/; http://www.notitarde.com/La-Costa/Llegaron-mas-de-3-mil-800-toneladas-de-alimentos-al-puerto-local-2356534/2015/02/25/492027/; and El Nacional; http://www.el-nacional.com/)

 

SIMADI FOREX rate is being used for customs clearances

Cipriana Ramos, President of the Customs and Port Affairs Committee of the National Trade and Services Council (CONSECOMERCIO) says "implementation of the new foreign exchange system in customs is a mess," since the customs clearance fee is being charged at the SIMADI foreign exchange rate of VEB 172/US$1, even when it had been announced that it would be charged at the foreign exchange rate traded at the Ancillary Foreign Currency Administration System (SICAD), currently standing at VEB 12/US$1. "It is not on paper, but that is what is happening at customs," she claimed. (El Universal, http://www.eluniversal.com/economia/150226/simadi-forex-rate-used-for-customs-clearance-in-venezuela; More in Spanish: El Universal; http://www.eluniversal.com/economia/150226/advierten-aplicacion-de-tasa-simadi-en-nacionalizaciones; El Nacional; http://www.el-nacional.com/)

 

 

Oil & Energy

 

Venezuela seeks annulment of Exxon award at World Bank tribunal

Venezuela has requested the annulment of a World Bank tribunal award that orders it pay Exxon Mobil Corp US$ 1.6 billion in compensation for nationalizations, both sides said on Wednesday. George Kahale, Venezuela's lawyer, said he did not know when the tribunal was likely to issue a decision on the request. "The first step is for the appointment of the committee to hear the annulment application, and that has not happened yet," said the lawyer with Curtis, Mallet-Prevost, Colt & Mosle LLP. "The schedule for the annulment process will not be determined until after the committee is appointed." (Reuters, http://www.reuters.com/article/2015/02/26/venezuela-exxon-mobil-idUSL1N0W007320150226; El Universal, http://www.eluniversal.com/economia/150226/venezuela-seeks-reversal-of-icsid-decision-on-exxon-mobil-case)

 

Foreign oil companies authorized to sell their FOREX

A dozen foreign oil companies operating jointly with PDVSA are now able to exchange their FOREX at the highest legal rate in use here through the new SIMADI system, at around VEB 172/US1. The step is meant as an incentive to improve the bolivar budget of these companies seeking to increase oil production in Venezuela. More in Spanish: (Panorama, http://panorama.com.ve/portal/app/push/noticia140684.php; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/reuters--autorizan-a-petroleras-extranjeras-a-camb.aspx)

 

Venezuela and Trinidad to seek joint gas exploration, jointly with international firms in the border areas. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/venezuela-y-trinidad-pactan-explotar-reservas-de-g.aspx#ixzz3SqUicm54)

 

Saudi Arabia says demand for crude oil growing, prices stabilizing

Saudi Arabia´s Oil Minister Ali al-Naimi says demand for crude oil is growing and markets are quiet. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/industria/demanda-de-crudo-crece-y-precios-se-estabilizan--a.aspx#ixzz3SqV18XyC)

 

Union leader reports Venezuela's 146,000 bpd El Palito refinery down

State oil company PDVSA's 146,000-barrel-per-day El Palito refinery has been halted since Monday due to problems with a compressor and a demineralization plant, union leader Ivan Freites said on Wednesday. "It's completely down," said Freites, adding there was no indication of when the refinery would restart. Amuay, the OPEC country's biggest refinery, is operating at 370,000 bpd, well below its 645,000-bpd capacity, because its flexicoker and a crude distillation unit remain out of service, Freites added. Cardon, which along with Amuay makes up the major Paraguana refining complex, is operating at about a third of its total 310,000-bpd capacity, according to workers and Freites. (Reuters, http://www.reuters.com/article/2015/02/26/venezuela-oil-refinery-idUSL1N0VZ28N20150226)

 

 

Commodities

 

Toilet paper-for-Venezuelan oil swap offered by Trinidad

Venezuela, plagued with shortages of basic goods, was offered a reprieve by the Prime Minister of neighboring Trinidad & Tobago: exchange oil for tissue paper. Prime Minister Kamla Persad-Bissessar suggested an oil-for-tissue swap in a news conference Tuesday following a meeting in Port of Spain with Venezuelan President Nicolas Maduro. She said the deal would benefit both countries. “The concept of commodity sharing is simple -– the Government of Trinidad and Tobago will purchase goods identified by the Government of Venezuela from T&T’s manufacturers, such as tissue paper, gasoline, and parts for machinery,” Persad-Bissessar said. (Bloomberg, http://www.bloomberg.com/news/articles/2015-02-25/tissue-paper-for-venezuelan-oil-swap-offered-by-trinidad)

 

There is no sugar because eight out of the 10 sugar mills in government hands are not operational, according to José Ricardo Álvarez, head of Venezuela’s Federation of Sugar Cane Producers’ Associations. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42924&idc=3)

 

 

Economy & Finance

 

New SIMADI FOREX system considered insufficient, government in "ideological straightjacket"

DATANALISIS President Luis Vicente León says the new SIMADI FOREX system is being operated with controls and a free market cannot operate that way. "The idea is that the market should set the price, not that the Central Bank will impose it; the exchange market is not open. If a company wants to sell at 180 it cannot, the Central Bank rejects the transaction because it is not the set price". Economists Ricardo Villasmil and Pedro Palma say "the government knows it should make economic sense, but it does not have it because it is trapped by its own ideological straightjacket". Palma says Venezuela is headed "toward an explosion", and that will "inevitably bring about the changes the country needs". More in Spanish:  (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/leon-simadi-podria-ser-un-sistema-disfuncional-si-.aspx#ixzz3SkjVuwQs; El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/economia/150227/analistas-preven-mayores-niveles-de-escasez-e-inflacion)

 

Maduro crackdown raises risks for foreign companies

President Nicolas Maduro’s increasing pressure on his political opponents amid a crumbling economy is a warning to the governments of foreign investors operating here. Citing an “endless coup” against his two-year-old government, and amid shortages of basic goods, he has accused companies of fomenting an “economic war,” ordering the arrests this month of executives of the country’s biggest pharmacy retailer and taking control of a supermarket chain. “What the Venezuelan government has clearly transmitted to the world it that is willing to take extreme measures,” said Elsa Cardozo, a professor of international relations at the Central University of Venezuela. “How far will this go? It depends how desperate Maduro is facing the internal crisis in Venezuela, which is very grave.” Maduro is seeking to deflect criticism of his government as the economy heads toward a 7% contraction, according to the International Monetary Fund, and his party faces legislative elections. The country’s 69% inflation rate is the highest in the world. “Maduro will likely continue to crack down on the opposition and the private sector as he looks to blame scapegoats for the country’s growing problems,” says Risa Grais-Targow, an analyst at consulting company Eurasia Group. (Bloomberg, http://www.bloomberg.com/news/articles/2015-02-24/venezuela-crackdown-raises-risks-for-foreign-companies)

 

Venezuela still seen defaulting in 2015 by Deutsche Bank

Deutsche Bank AG and Jefferies LLC still see Venezuela running out of money to pay debt in 2015. They’re the only ones out of 10 firms surveyed by Bloomberg, which included Goldman Sachs Group Inc. and Credit Suisse Group AG. While the country has raised almost US$ 5 billion in the past month and oil has jumped 21%  from an almost six-year low, Deutsche Bank’s Armando Armenta says that’s still not enough. Venezuela needs US$ 32 billion to finance itself this year, according to his estimates. “The financing gap that they are facing for this year with current oil prices is just too large...I don’t see a path out in which they can avert default.” Venezuela, which relies on crude for more than 95% of exports, and its state oil company have about US$ 10 billion of debt due this year, according to Armenta. That’s equal to 43% of the country’s US$ 23 billion in foreign reserves. The nation will also need about US$ 40 billion to import everything from milk to toothbrushes, according to Armenta’s estimates. Venezuela’s latest measure to ease a shortage of hard currency will also prove insufficient, says Deutsche’s Armenta. “All these measures they might announce or might not announce in coming months, even though they would’ve helped a few months ago, would not be enough during this year,” Armenta said. “Some sort of external financing for the economy is needed. I don’t know what could be a source.” (Bloomberg, http://www.bloomberg.com/news/articles/2015-02-24/venezuela-still-seen-defaulting-to-deutsche-bank-andes-credit)

 

How long will China prop up Venezuela?

China has poured some US$ 100 billion into Latin America and the Caribbean through loans and infrastructure projects. Cui Shoujun, of Beijing's Renmin University, says all is part of a long term strategy to establish global multilateral alliances and "reconstruct the world order". "The short term benefits or losses are secondary", he says. But Chinese loans to Venezuela are over US$ 45 billion, including a US$ 10 billion credit backed up by future oil supply. Venezuela will this be a Litmus test for China in the area. China is already sending out signals that there are limits to its generosity and the pace of financing has slowed down from 50% annually (2009-2011) to 10% in 2014, and that tied to specific projects. There are about US$ 150 billion investment projects currently signed and in limbo as they have not been carried out. What is unusual about China´s credit policy in the region is the way it is done. Beijing has chosen a particularly opaque bilateral method which rarely discloses the terms or use of funds. Venezuela's legislature has not authorized debts with China since the government treats them as "financing" to be paid for in oil, not dollars. Under this dubious argument funds do not enter official accounting and escape all forms of public control. If Nicolás Maduro is caught in the choice of paying debt or feeding the population, few analysts doubt that his instinct for political self preservation he will invoke a credit event and even interrupt oil shipments to China in order to sell them on the spot market. Venezuelan Professor Ricardo Hausmann, of the Harvard University Center for International Development de la Universidad de Harvard, says Beijing is paying the price of its inexperience as financier to emerging nations. "China has ignored the main reason lender nations turn to the IMF to evaluate the macroeconomics of the recipients: Lending money to support unsustainable policies simply delays the day of reckoning." More in Spanish: (Infolatam, http://www.infolatam.com/2015/02/24/hasta-cuando-sostendra-china-venezuela/)

 

 

Politics and International Affairs

 

Teenager killed by police in San Cristobal protest, city tense during funeral

A 14 year old teenager has been killed in the western city of San Cristobal in a protest over the worsening economic crisis. He was hit in the head by a bullet during a clash between hooded protesters and the police. Home Affairs Minister Admiral Carmen Melendez confirmed the arrest of a 23-year-old policeman has been arrested in connection with the death. President Maduro went on national television to regret the death of the student and call for an end to violence. He said hatred against the government has led to dozens of deaths in Venezuela and promised a full investigation. The streets of San Cristobal, the Venezuelan city that sparked riots nationwide last year, were deserted Wednesday after the funeral of a teenager shot by police the day before. Schools were closed and businesses shuttered in the eastern neighborhoods of the city of 700,000 near the Colombian border. Small groups of youths burned trash in the streets to protest the killing. About 100 people gathered at the spot where Roa was shot near the Catholic University of Tachira Wednesday evening for an informal mass. Classes at all colleges and schools in Tachira state have been suspended to minimize the risk of violence, said Joanna Fernandez, a governor’s office spokeswoman. (BBC News, http://www.bbc.com/news/31616847?utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief; Bloomberg. http://www.bloomberg.com/news/articles/2015-02-25/venezuela-riot-center-tense-ahead-of-killed-student-s-funeral)

 

Student leaders, opposition and NGO's seek repeal of "mortal force" resolution

A group of student leaders, jurists, academicians and opposition leaders have asked the Supreme Tribunal to annul resolution 8610 by Defense Minister General Vladimir Padrino calls for the "use of potentially mortal force" if required during demonstrations, and say it "flagrantly violates the Constitutional and is a license to kill". The Roman Catholic clergy, led by the Episcopal Conference, is also asking authorities to refrain from using illegal methods and weapons. San Cristóbal Bishop Mario Moronta says "we beseech civil, millitary and police authorities to refrain from illegal using methods or weapons against the dignity of human beings". More in Spanish: (Infolatam, http://www.infolatam.com/2015/02/27/plantean-otro-recurso-contra-el-uso-de-fuerza-mortal-en-venezuela/)

 

International condemnation of Maduro regime grows, HRW asks UNASUR to condemn abuses in Venezuela

  • Human Rights Watch (HRW) has encouraged the Union of South American Nations (UNASUR) to condemn serious human rights abuses perpetrated by the Venezuelan government against political opponents and demonstrators. HRW lamented that "neither UNASUR nor its Member States –except for Colombia and Chile- have voiced concern over the detention of political opponents and widespread abuses perpetrated against demonstrators or pedestrians during demonstrations in Venezuela last week".
  • Federica Mogherini, spokesperson for the European Union says "the recent detention of Caracas mayor and veteran opposition leader Antonio Ledezma is a cause for alarm, as well as reports of alleged intimidation and mistreatment of other imprisoned opposition leaders and students that took part in last year's protests".
  • US Secretary of State John Kerry called the murder of the child in Táchira horrible and said the Venezuelan regime "continues to move in the wrong direction", he told Congress that US authorities have not yet frozen assets of Venezuelan officials accused of violating human rights because of legal steps necessary in order to implement the sanctions law.
  • The European Parliament held a plenary session on Venezuela's political situation and a majority of members demanded the liberation of Caracas Mayor Antonio Ledezma and an end to violence and repression here. Christos Stylianides, second in charge of the European foreign action group, called the jailing of opponents and restricting their rights "deplorable". 
  • Nobel Peace Prize winner Oscar Arias, former President of Costa Rica, lamented the "absolute indifference" of Latin American governments to what is going on in Venezuela. Brazil’s Lower House Plenary passed a “condemnation motion” against the Venezuelan government, with the support of almost all of the 28 political organizations in its Congress. In it, it accuses the Venezuelan government of “breaking democratic principles, with crimes against individual freedoms and due process.”


 

Colombia's Santos offers to mediate between Venezuela's government and opposition

Colombian President Juan Manuel Santos has said he is willing to mediate between Nicolás Maduro's regime and Venezuela's opposition "if asked by both parties", in order to help solve the crisis the neighboring country is going through, and said the so-called "troika"" made up of the Foreign Ministers of Brazil, Ecuador and Colombia stand ready to help as soon as it is asked. He pleaded for respect for the rights of jailed opponents here and "guarantees for a due process". More in Spanish: (Infolatam, http://www.infolatam.com/2015/02/26/entrevista-santos-cuatro-noticias-editar/)

 

UN, OAS AND international organizations seek a peaceful solution to Venezuelan crisis

UN Secretary General Ban Ki-Moon expressed his "worry about new reports of violence and loss of life in Venezuela" and backed UNASUR efforts to reinitiate dialogue between the government and opposition. OAS Secretary General José Miguel Insulza regretted the death of a 14 year old student and called for renewed dialogue. The Union of South American Nations (UNASUR) also expressed grief over the death of the student and repeated its availability to help find democratic and peaceful solutions. Former U.N. secretary-general Kofi Annan has also asked Venezuela to resolve its domestic political differences in a peaceful manner without resorting to violence. (El Universal, http://www.eluniversal.com/nacional-y-politica/150226/oas-calls-for-dialogue-to-stop-violence-in-venezuela; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2375895&CategoryId=10717; and more in Spanish: El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/150227/onu-inquieta-por-los-reportes-de-violencia-y-respalda-a-unasur)

 

Maduro charges paramilitary infiltration from Colombia

President Nicolás Maduro called on policy and military to be on "maximum alert" because the US is "trying to infiltrate a group of paramilitaries from Colombia, dressed as civilians, to cause violence". More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150226/maduro-denuncia-que-desde-colombia-infiltran-paramilitares; El Nacional; http://www.el-nacional.com/)

 

Venezuela to ask HSBC to name officials with Swiss bank accounts

Venezuela will ask British bank HSBC Holdings PLC for a list of state officials who have accounts in its Swiss subsidiary, the State Prosecutor General said on Wednesday, following media reports that Venezuelans were among the bank's leading clients. Venezuela and its citizens had some US$ 14.8 billion in assets in HSBC's Swiss private banking arm in 2007, the third-largest for any country, according to data obtained by the International Consortium of Investigative Journalists (ICIJ). (Reuters, http://www.reuters.com/article/2015/02/25/hsbc-venezuela-idUSL1N0VZ1UU20150225; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42920&idc=2)

 

Primary dates for opposition and government party have been set for May 17th and June 21st, respectively. The National Elections Council has just made the announcement. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150225/cne-fijo-fecha-de-primarias-de-mesa-de-unidad-y-psuv)

 

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.