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.

Tuesday, April 22, 2014

April 22, 2014

International Trade

Over than 11,000 tons of food arrived at Puerto Cabello
  • 9.118 tons of whole milk powder, pasta, frozen chicken, margarine and frozen beef from Uruguay's Conaprole, Pastificcio Selmi, Bunge Alimentos, Minerva, BRF, Granja Tres Arroyos and Frigorífico de Aves Sochuy, for state company CASA
  • 2.495 tons of frozen beef and chicken, whole milk powder, rolled oats, milk and cream concentrated milk from Matadero Nuevo Carnic, Nestlé Argentina, Setrading and Centrolac, for CASA, Nestlé Venezuela and, Pdval
Other Charges
  • 3.000 tons of prefabricated building materials from Yakima Trading for PDVSA Industrial
  • 1.366 tons of aluminum ingots from Spain for Pellizani
  • 59 tons of sanitary napkins from P&G
  • 55 tons of hygiene products from P&G

Venezuela bought over U$D 176 million in pharmaceutical products from Cuba in 2013, making the Caribbean island one of the main suppliers, according to the National Institute of Statistics (INE). This amount does not include purchases made via the Cooperation Comprehensive Agreement between the two nations. In its 2013 annual report, the Comptroller General’s Office detected several irregularities in these purchases after going over nine contracts between the Venezuelan Health Ministry and Cuban companies. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=38937&idc=3)

Comptroller identifies flaws in the Emergency Supplies program
The National Comptroller's office has found "weaknesses" in purchasing, supervision and controls within the Food Supply Emergency Plan conducted by PDVSA Agriculture, BARIVEN and PDVAL during 2007, 2008 and 2009. The Puerto Cabello Main Customs office was also at fault in losses of up to VEB 160 million. The investigation began in June 2010 when abandoned containers were found with 16,000 tons of spoiled food, and the Comptroller's office says "no documentation was provided by the responsible agencies" during the process. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/contraloria-detecto-faltas-en-el-plan-de-emergenci.aspx#ixzz2zW4ONlKt; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/contraloria-general-jalo-las-orejas-por-comida-pic.aspx#ixzz2zW0a3uhm)

Logistics & Transport

Port services cost adjusted back to prior VEB 6.30/U$D parity
The local Port Authority has backed down on a decision to adjust services it provides to Venezuela's new parity. After numerous complaints by the business community, the government agency has decided to estimate charges for port services at the previous VEB 6.30/U$D. In February it had decided on an upwards adjustments for storage, security, moving and all other services to importers and exporters. More in Spanish: (El Universal; http://www.eluniversal.com/economia/140421/bolipuertos-cobrara-sus-servicios-en-funcion-de-la-tasa-de-630)

Oil & Energy

PDVSA expands Caribbean storage, rents NuStar tanks
Petroleos de Venezuela (PDVSA), which urgently needs space in the Caribbean to store its oil, has emerged as the renter of tanks owned by NuStar Energy, a San Antonio, Texas-based pipeline and terminals company, on the island of Saint Eustatius, where the state-run company will blend crudes. "The company renting the tanks in Saint Eustatius is PDVSA. They will use the facility as a mixing hub to produce blends that can then be exported," one of the sources said. (Reuters, http://www.reuters.com/article2014/04/21/us-oil-venezuela-st-eustatius-idUSBREA3K0X320140421)

Commodities

Massive imports planned to bolster basic industries
The Ministry for Industries is planning to refloat basic industries in the Guayana region with massive imports and fiscal incentives aimed at improving productivity. Steel and aluminum production has dropped as payrolls have swelled. Steel production contracted 3% in 2012-13, while aluminum production plunged 28% due to labor strife and problems importing components and spare parts. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140422/suplen-deficiencias-en-empresas-de-guayana-con-importaciones)

Economy & Finance

Venezuelan government debt now up to USD 158 billion
Even as oil prices last year were over U$D 90, the Venezuelan government sped up indebtedness, up 9% in the same one-year term. In 2012, debt by the Venezuelan government and state-run oil holding Petróleos de Venezuela (PDVSA) closed at U$D 144.8 billion. In 2013, it climbed to U$D 158.5 billion. (El Universal, http://www.eluniversal.com/economia/140421/venezuelan-govt-debt-amounts-to-usd-158-billion)

Central Bank withholds March inflation and scarcity data; yearly inflation now running close to 60%
23 days into April, Venezuela's Central Bank has not revealed March inflation and scarcity data which it is required to provide within the first 10 days of each month. Bank president Nelson Merentes has said the inflation rate is not positive and the Venezuelan economy is undergoing low growth. He blamed ongoing political antagonism for inflation. José Guerra, the Bank's former research director, says March inflation was 4.1% and the yearly rate is almost up to 60%. Merentes says a new "economic offensive" announced by President Maduro aims to increase productivity jointly with private and state companies since we are in a "low economic growth" stage. He says meetings are being held with the private sector and that ways will surely be found to solve current difficulties. (El Universal, http://www.eluniversal.com/economia/140421/central-banks-president-venezuela-is-facing-low-growth; and more in Spanish: La Verdad: http://www.laverdad.com/economia/50639-inflacion-de-marzo-es-un-misterio.html; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/merentes-estamos-en-una-fase-de-bajo-crecimiento-e.aspx#ixzz2zbtiR0vD; El Universal, http://www.eluniversal.com/economia/140422/bcv-dice-que-economia-esta-en-fase-de-bajo-crecimiento)

Bank of America predicts Venezuela will align exchange rates
According to Bank of America, next year Venezuela will replace its three legal foreign-exchange rates with a single valuation of VEB 45/U$D1, which would be a devaluation around 86%. “The government faces no major electoral constraint to a large devaluation of the currency,” says Francisco Rodriguez, senior Andean economist at the bank. “Most of the economic and political costs of such an adjustment were already paid". The government provides 80% of foreign currency to companies and citizens at the official rate of 6.3 per dollar, Economic Affairs Vice President Rafael Ramirez reiterated last month. The remaining 20% is sold through secondary systems, known as Sicad I and Sicad II, for VEB 10 and 49.3 per dollar. Companies and individuals who cannot access to the legal currency mechanisms pay much moe on the black market. (Bloomberg, http://www.bloomberg.com/news/2014-04-17/venezuela-will-align-exchange-rates-bofa-says.html)

Rigid economic model hits Venezuela's state-owned firms
Annual reports from state-owned corporations unveil failures, and show that the straitjacket imposed by the socialist model hurts the public sector as much as it does the private sector. Lack of foreign currency, restrictions on imports, low stocks, outdated technology, and prices falling behind are the hurdles reported not only by entrepreneurs, but also state-owned corporations in 2013. (El Universal, http://www.eluniversal.com/economia/140421/rigid-economic-model-hits-venezuelas-state-owned-firms)

Coke takes U$D 247 million loss from Venezuela devaluation
Coca Cola’s first quarter 2014 earnings fell 4.2% from last year, with an 8% drop in net income and the company reporting U$D 10.58 billion in revenue. Coca Cola attributed the lower results to global factors including a devaluation of Venezuela’s bolivar currency, lower volume in Europe, and the sale of bottling operations in Brazil. Still, the figure was above the U$D 10.55 billion analysts had been guided to expect. Coca-Cola said that it would take a charge of U$D 247 million from Venezuela’s continuing currency woes. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=1946445&CategoryId=10717)

Brink's writes-off U$D 400 million due to Venezuela devaluation
"Since Brink's has been able to obtain U.S. dollars at the SICAD II rate (approximately 50), and is not eligible to apply for exchange at the official rate (6.3), and does not expect to be able to access the SICAD rate (11), it is adopting the SICAD II rate for reporting Venezuela results," the company said. Applying the SICAD II rate, Brink's says 2013 revenue of U$D 447 million from Venezuela would have been reduced to about U$D 56 million. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=1943359&CategoryId=10717)

SPECIAL PRESENTATION ON VENEZUELA's ECONOMY - ATTACHED: Attached is a special presentation on Venezuela's economy by Russ Dallen, Editor in Chief of the Latin America Herald Tribune.

Politics

Protesters fight police, burn Maduro puppets in Venezuela
Masked youths battled police, protesters burned and hung from lamp-posts effigies of President Nicolas Maduro and marchers demanded the "resurrection" of democracy on a volatile Easter Sunday in Venezuela. Though millions of Venezuelans have headed for Caribbean beaches and family gatherings over the Easter period, student demonstrators have sought to keep a nearly three-month protest movement going with religious-themed demonstrations. After a barefoot walk and a "Via Crucis" march in the style of Jesus' tortured walk towards crucifixion earlier in the week, hundreds of demonstrators began Sunday with a rally denominated "Resurrection of Democracy." (Reuters, http://www.reuters.com/article/2014/04/21/us-venezuela-protests-idUSBREA3J0IP20140421; http://www.reuters.com/article/2014/04/18/us-venezuela-protests-idUSBREA3G2I020140418; More in Spanish: CNN, http://cnnespanol.cnn.com/2014/04/20/opositores-marchan-por-la-resurreccion-de-la-democracia-en-venezuela/?iref=allsearch)

Tear gas and barricades as protests start anew in Lara, Táchira and Carabobo states
Authorities attempted to disperse renewed protests in Lara, Táchira and Carabobo states using tear gas bombs. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140422/jornada-de-gases-y-barricadas-en-lara-tachira-y-carabobo)

Pope calls for end to war and to violence in Venezuela
Pope Francis, in his Easter address before a huge crowd called for an end to conflicts in Syria, Ukraine and Africa. He also asked for an end to violence in Iraq, Venezuela, South Sudan and the Central Africa Republic. (Reuters, http://www.reuters.com/article/2014/04/20/us-pope-easter-idUSBREA3I0F920140420; More in Spanish: CNN; http://cnnespanol.cnn.com/2014/04/20/francisco-pide-fin-de-todas-las-guerras-y-reconciliacion-en-venezuela/?iref=allsearch; Fox News, http://www.foxnews.com/world/2014/04/20/pope-easter-message-urbi-et-orbi/; El Universal, http://www.eluniversal.com/nacional-y-politica/140421/pope-prays-for-reconciliation-in-venezuela)

Opposition calls for freeing  political prisoners before continuing talks with the government
The seven major political parties that take part in the Democratic Unity Conference (MUD) are discussing the formation of the working groups it may jointly set up with the government before they continue holding weekly meetings with officials. All opposition groups will consider this matter, along with the proposed Amnesty Law, naming new judicial and election authorities, and taking part in "peace keeping plans". Delsa Solorzano, of Un Nuevo Tiempo says they "want to work for freeing the political prisoners, whether by amnesty, pardons, or stays". Opposition legislator Edgar Zambrano has expressed optimism about the approval of an Amnesty Law to release prisoners, allow the return of those in exile, and stop persecution against political leaders. In his 44th request to President Nicolás Maduro for a hearing to address the issue, the opposition legislator claimed that a new Amnesty Law was likely to be drafted, and said it would be different from those previously presented. (El Universal, http://www.eluniversal.com/nacional-y-politica/140421/opposition-deputy-new-amnesty-law-is-possible-during-talks; and more in Spanish: El Nacional; http://www.el-nacional.com)

Machado appeals to Supreme Court for her parliamentary rights. Opposition leader María Corina Machado, who was stripped of her parliamentary rights by National Assembly President Diosdado Cabello for attempting to speak at the Permanent Council of the OAS as an alternate representative for Panama, has appealed to Venezuela's Supreme Court on the grounds that Cabello's decision is unconstitutional. The decision was subsequently supported by the Court itself, which ruled that her parliamentary mandate had been extinguished. Machado says the decision deprives her of due process and is not allowed within Venezuela's legal system. Her lawyers point to similar cases, such as that of pro-Government legislator Abdel-e-Zabayar, who went to fight for the Syrian regime and later returned to his parliamentary bench. More in Spanish: (Infolatam)

China supports Venezuela's "model" and dialogue for solving problems. China's Foreign Minister Chang Yi, currently in Caracas, has expressed his country's support for Venezuela's "21st century socialism" and called for "political dialogue" to resolve internal discrepancies. He said China "understands and supports" the system proposed by the late Hugo Chavez. China is one of Venezuela's key trade, energy and financial partners. It receives around half a million barrels of oil per day from Venezuela and maintains two important open funds with this nation for over U$D 35 billion for economic and social development. Chang Yi met with President Nicolás Maduro, who announced they have agreed to create new China-CELAC (Community of Latin American and Caribbean States) Fund. More in Spanish: (La Vanguardia, http://www.lavanguardia.com/politica/20140422/54406022425/china-respalda-modelo-de-venezuela-y-el-dialogo-para-resolver-los-problemas.html; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/maduro-recibe-a-canciller-chino-en-miraflores.aspx#ixzz2zbnxg7vZ)



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, April 15, 2014

April 15, 2014

International Trade

Recent imports at Puerto Cabello
  • 30,000 tons of corn from Brazil, for state company CASA
  • 195 tons of frozen beef from Brazil, also for CASA.
  • 338 tons in 19 vans of condensed milk and baby formula, from NESTLÉ Mexico to NESTLÉ Venezuela.
  • 765 tons in 26 containers of condensed milk from Uruguay to Alimentos NISA and Lácteos La Cabaña 
  • 60 tons of butter from ECOLAT Uruguay, for Flor de Aragua. 
  • 5,495 tons of cement, along with steel mesh and corrugated cardboard also arrived.

Commodities have been left behind in Panama
Since the government broke relations with Panama goods coming from that country were left there, including appliances, medicines, chemicals for agriculture and food were left behind while merchants here have been left with little to sell. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/investigacion/mercancia-se-quedo-varada-en-panama.aspx#ixzz2yrL3vcSv; El Mundo, http://www.elmundo.com.ve/noticias/actualidad/noticias/mercancia-se-quedo-varada-en-panama.aspx)

Logistics & Transport

Airlines will not be repaid at VEB 4.30 or at 6.30, contrary to what the Minister had announced 
Contrary to what General Hebert García Plaza, Minister for Aquatic and Air Transportation, said a few weeks ago, an inside source who asked to remain anonymous says the decision has been made to repay all government debts with airlines pending since 2012 at the SICAD 1 rate, which averages VEB 11/U$D. "Negotiations are stalled, no payment has been made since the announcement made by General García Plaza. Authorities are proposing different forms of payment to the airlines, and the companies are studying them. For the time being no airline has accepted full repayment at the SICAD 1 rate", it said. More in Spanish (El Nacional; http://www.el-nacional.com/)

Oil & Energy

Venezuela's proven oil reserves up 0.2%
Venezuela's proven reserves went up 0.2% in 2012-2013, says the Ministry of Petroleum and Mining. (El Universal, http://www.eluniversal.com/economia/140414/venezuelas-proven-oil-reserves-up-02)

Commodities

Basic food scarcity index was up to 60.2% at the close of Q1 2014
According to measurements taken by DATANALISIS the scarcity index for regulated foodstuff averaged 51.9% during Q1 2014, and rose to 60.2% by the end of March. The survey includes supermarket chains, independents, grocery stores, informal trade and the government network including MERCA, PDVAL AND Abastos Bicentenario. Consumers could access an average of 9 out of 18 products in the basic food basket. The scarcity index rose 36% above 2012 and 14.7% above 2013. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140415/escasez-de-alimentos-basicos-se-ubico-en-602-en-marzo)

Economy & Finance

High oil prices do not translate into high international reserves
Constraints on FOREX available at the official exchange rate for key sectors of the Venezuelan economy are due to fewer US dollars available at the Central Bank of Venezuela.  International reserves available for core imports and debt service is running below demand. Whereas oil prices have been above U$D 90 over the past years, commitments by state-run oil holding Petróleos de Venezuela (PDVSA) have limited the sale of foreign currency to the BCV. As a result, the flow for purchases of raw materials, finished products and equipment, as well as payment of services, has narrowed. (El Universal, http://www.eluniversal.com/economia/140414/high-oil-prices-do-not-mean-high-international-reserves)

Fewer items will be imported at VEB6.30/U$D
The Cencoex is going over the current customs codes (goods and services) to determine which could go from the Bs.6.30:$ rate to the fluctuating SICAD 1 rate, set at Bs.10:$ in the most recent bid. The procedure with the Cencoex would be the same (the companies would not participate in the bidding) but when the Venezuelan Central Bank (BCV) liquidates the dollars, it would do at the SICAD 1 rate. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=38903&idc=2)

Anglo American sues Venezuela over U$D 600 million expropriation
Global mining company Anglo American PLC has become the latest corporation to file suit against Venezuela over its treatment of investors. Venezuela now has 28 cases pending against it – the most of any nation in the world. Argentina, which had previously held the number one spot, now has only 24 cases listed as pending. The World Bank’s International Center for the Settlement of Investment Disputes (ICSID) has accepted a request for arbitration against Venezuela filed by Anglo American’s lawyers. The company says that Venezuela's actions regarding the Loma de Niquel mining concession - including the expropriation of Loma’s assets without prompt, adequate and effective compensation - breached the UK-Venezuela Bilateral Investment Treaty. According to the ICSID docket, Venezuela now has 28 cases pending against it – the most of any nation in the world -- after a rash of expropriations and nationalizations by Venezuela's late President Hugo Chavez - who formally removed the country from ICSID jurisdiction in January of 2012, saying he would not accept any further rulings from the arbitration court. However, clauses in bilateral investment treaties and individual contracts continue to give ICSID jurisdiction to hear cases against Venezuela. Other companies with pending ICSID arbitrations against Venezuela include mining and smelting companies Gold Reserve Inc., RUSORO Mining Ltd., CRYSTALLEX International Corporation, and TENARIS SA; food industry companies GRUMA, POLAR, LONGREEF, VESTEY, and OWENS-ILLINOIS Inc.; and oil industry companies Tidewater Inc., Williams Cos. Inc., KOCH Industries Inc., CONOCOPHILLIPS, and EXXONMOBIL. (Reuters, http://www.reuters.com/article/2014/04/12/angloamerican-venezuela-idUSL2N0N40BP20140412; Bloomberg, http://www.bloomberg.com/news/2014-04-12/anglo-american-files-for-arbitration-over-venezuela-concession.html; and Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=1926189&CategoryId=10717)

Opposition demands inflation data
Venezuela's opposition has accused the government of delaying publication of March inflation data for political reasons, saying the annual rate has reached an alarming 60%. The Central Bank is supposed to publish the closely watched consumer price index in the first 10 days of the month, but delays sometimes occur. Venezuela has the highest inflation in the Americas, with the opposition saying that is evidence of the failure of socialism and President Nicolas Maduro blaming his opponents for sabotage, hoarding and economic "war" against him. (Reuters, http://www.reuters.com/article/2014/04/14/venezuela-economy-idUSL2N0N60K720140414)

Politics

Dialogue is continuing between the government and opposition, Brazilian FM back in Caracas
Talks are continuing between government representatives and members of the opposition Democratic Unity Conference, and Brazil's Foreign Minister Luiz Alberto Figueiredo is back in Caracas to act as "witness" on behalf of UNASUR. (El Universal, http://www.eluniversal.com/nacional-y-politica/140415/gobierno-y-mud-discuten-sobre-metodologia-y-temas-del-dialogo); Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/este-martes-continua-dialogo-entre-gobierno-y-la-m.aspx#ixzz2yx8q0BLI; http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/canciller-brasileno-viaja-a-caracas-para-segunda-r.aspx#ixzz2yxAVLLSz

Capriles: Change in Venezuela will not be driven by violence, calls on the government to truly dialogue
"Whether you like it or not, our Venezuela changed on April 14, but it changed for an inclusive proposal and a country where we all represent everyone," says opposition leader Henrique Capriles Radonski in summarizing opposition achievements in the presidential election of April 14, 2013. Capriles apparently lost by a margin of 1.49% (7.3 million votes, that is, 49.12%), but asked the National Elections Council to audit all ballot boxes, tally sheets, and poll books on grounds that the election had been subject to irregularities. The initially promised audit never took place. Capriles also said the government must prove that it wants to dialogue. He said "The country is skeptical of dialogue because a lot of water has gone under the bridge and since there are no concrete actions, they can be indifferent. But it is up to the government for that to change. How can it change and prove that it really wants a dialogue? If there are actions, there are signs." (El Universal, http://www.eluniversal.com/nacional-y-politica/140414/capriles-no-change-in-venezuela-will-be-driven-by-violence; and http://www.eluniversal.com/nacional-y-politica/140415/miraflores-debe-dar-senales-de-que-quiere-dialogar)

Machado asks European Parliament to send a mission to Venezuela
Ousted National Assembly legislator María Corina Machado spoke to the Foreign Affairs Commission of the European Parliament on the situation in Venezuela, and requested the group send a mission to Venezuela, "to get a first hand view of repression carried out by the Maduro regime". Her request was supported by Spain's Socialist legislator Luis Yañez, who proposed the mission travel next June. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140415/solicitan-a-eurodiputados-el-envio-de-mision-a-venezuela)

Venezuela's military admits excesses during deadly protests
The military here has admitted it committed "some excesses" during weeks of political unrest that have left more than 40 people dead. The military's strategic command chief, General Vladimir Padrino, said they were investigating 97 officers and police staff for "cruelty and torture". But the general stressed these were less than 1% of all officers. Security forces have been accused of human rights abuse during the almost daily anti-government protests. The opposition and human rights activists accuse the security forces of repression and using heavy-handed tactics. "No soldiers have received orders to hurt anyone, harass or end the life of a Venezuelan," says General Padrino. (BBC)


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, April 11, 2014

April 11, 2014

International Trade
Inbound cargo at Puerto Cabello
116.000 tons of frozen beef from Argentina, Brazil and Uruguay, for the CASA government agency.
32,000 tons of yellow corn from US ADM Américas to Alimentos Balanceados Tinaquillo.
4,999 tons of yellow corn from Bunge Latin America to Concentrados Valera, along with 1,999 of soybean meal 20.000 tons of Canadian wheat from Avalon Grain for Pastas Capri
18.000 tons of soybean meal
7.000 tons of malt
4.500 tons of barley
2.000 tons of chicken from Mulsa, Granja Tres Arroyos, Bonnen Hermanos and el Frigorífico de Aves Sochuy for CASA
1.643 tons of frozen chicken from Rasic Hermanos for CASA
Over 1,500 tons of sodium phosphate from Potashcorp for PROAGRO.
871 tons of construction supplies from Isotex Dominicana for PDVSA
720 tons of meat from Brazil RXM Importación y Exportación for CASA
563 tons of milk and concentrated cream, from Argentina for PDVSA, CASA and BARIVEN
427 tons of chicken and 201.000 tons of meat from Granja Tres Arroyos for CASA
384 tons of parts for government power plants
231 tons of meat from Brazil's Domvil for CASA
167 tons of frozen chicken from Frigorífico Garina Saic for CASA
112 tons of aluminum tubing from China Machinery Engineering (CHEM) sent to its subsidiary in Venezuela
10.200 Brazilian heads of cattle from Cooperativa Catalpa for Inversiones 6308, Inveragro and Importadora Nutricional
4.913 tons (10.100 heads) of Brazilian cattle for several consignees
2.992 tons (6.100 head) of cattle for Distribuidora Alemán, Importadora San Pedro e Inversiones 6308
Exports: Several loads of aluminum products, cattle skins and coaxial cables were sent to Colombia and the US.

Newsprint arrives
300 tons of printing and writing paper from United States, Pérez Trading for Multi Suministros Plastitol.

Logistics & Transport
Government to acknowledge only up to 70% of the $3.8 billion debt it has with international air carriers and at the SICAD 2 exchange rate while dismissing between 29% and 35% of that debt accrued in 2013. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=38837&idc=2)

Oil & Energy
Asia overtakes U.S. as top destination for Venezuela oil –PDVSA
Asia overtook North America last year as the main destination for Venezuelan exports of crude oil and processed fuels, according to preliminary data submitted to parliament by state oil company PDVSA. Asia received an average of 1.04 million barrels per day (bpd) from Venezuela in 2013, up a fifth compared with the previous year. Meanwhile, exports to the United States, Canada and Mexico fell 11% to 879,000 bpd. PDVSA said it was increasing shipments to Asia, while maintaining those to South and Central America and the Caribbean, as part of a long-held strategy of market diversification. Asia accounted for 41% of Venezuela's oil exports last year, PDVSA said, with the majority being received by China at 563,000 bpd, and India at 396,000 bpd. The decline in Venezuelan oil shipments to the United States has affected PDVSA's Houston-based refining subsidiary, CITGO Petroleum Corp, which no longer receives processed fuels, condensate or light sweet crude from Venezuela. (Reuters, http://www.reuters.com/article/2014/04/10/venezuela-oil-idUSL2N0N21X120140410)

PDVSA exports to PETROCARIBE nations rose 21% in 2013
During 2013, PDVSA dispatched 122,000 barrels per day to nations participating in the PETROCARIBE system, for an increase of 21%. Those nations benefitted were Antigua and Barbuda, Belize, Dominica, Granada, Guyana, Haiti, Jamaica, Nicaragua, Dominican Republic, Saint Kitts and Nevis, Saint Vincent and the Grenadines, and Surinam". PDVSA supplies 50% of the energy needs of member nations. (El Universal, http://www.eluniversal.com/economia/140411/pdvsa-elevo-21-volumen-de-despachos-a-petrocaribe)

PDVSA social spending was down 18% in 2013 as income drops 7%, earnings come from devaluation
PDVSA has reported that their 2013 income was around U$D 116.2 billion, down 7% from 2012, and expenditures for social programs dropped 18% to U$D 14.1 billion. Total expenses were U$D 75.8 billion, 21% below 2013. According to the report, the U$D 8.2 billion setback was "mainly caused by a 2% decrease in the average export price of the Venezuelan oil basket, from U$D 103.42 per barrel in 2012 to U$D 101.40 per barrel in 2013." (El Universal, http://www.eluniversal.com/economia/140410/pdvsas-income-7-down-earnings-up-out-of-devaluation; and more in Spanish: El Nacional, http://www.el-nacional.com/)

STRATFOR special report: Politics cloud the chances of an energy sector revival
For the Venezuelan energy sector uncertainty will remain prevalent, limiting the government's ability to address key structural concerns. Karen Hooper, Director of STRATFOR's Latin America analytical section, says "the political issues that are at stake really aren't going away so we'll probably see those spring up again in the coming months...but Rafael Ramirez, was promoted to be in charge of the country's economic planning just recently, and we did see them settle a negotiation with the PDVSA laborers to give them a 90% raise for their next contract. PDVSA (has) given China and Chinese companies a leg up in investing in Venezuela, but there hasn't really been a recovery in energy production in Venezuela, no matter what the government is reporting, production has really declined. Everybody in Venezuela who's vying for participation in the government or control of the country has an interest in that energy infrastructure existing and persisting so that when they come to power they are able to sort of glean the benefits from it. The threats to energy exports from Venezuela are really not that big this time around...The biggest challenge though is that the sector is overall underinvested...We need to be looking for the new fiscal regime, to see how much they are going to be able to rein in inflation, shortages, things like that, things that are affecting not just consumers on a day-to-day basis but also energy producers, so there are shortages of cement, there are shortages of steel in Venezuela. These are all affecting the ability of foreign investors and domestic actors to be able to even actually service oil production in Venezuela. We also have to make sure we're keeping an eye on how labor morale is at PDVSA because challenges in the unions there could really impact output and also exports. So that's what we're watching, but overall it looks like there's going to continue to be a slow decline in the quality of output and also the quantity of output that the energy infrastructure is able to handle, and we'll just be looking for those disruptive signs going forward." More important would be possible changes in government spending and subsidies. Officials have acknowledged that electricity rates will have to rise, because the government can no longer afford to subsidize 80% of the cost of the utility. Raising the extremely low cost of gasoline is also under discussion... (But) the greatest potential threat to Maduro comes from a loss of legitimacy with the base of support that drove Chavez's ascendance..(which).. could worsen the unrest and force the military to step in against Maduro. But if the president does not make the difficult economic decisions that could negatively affect his base of support, widespread economic deterioration is likely. In short, he faces a loss of political power whether or not he implements reforms. All of this uncertainty, combined with the legacy of nationalization left to Maduro by Chavez, has made foreign investors wary...Best-case scenarios suggest it would take tens of billions of dollars and 5 to 10 years before a real reversal in Venezuela's energy fortunes would be seen. (STRATFOR, http://www.stratfor.com/sample/analysis/venezuela-politics-cloud-chances-energy-sector-revival)

Commodities
FX regime wiping out car makers, vehicle production plunges 76.07%. One of the world’s most complex foreign exchange regimes is wiping out profits at some of the world’s biggest carmakers. First, FORD said it would take a charge of U$D 350m in the first quarter because of currency losses in Venezuela. Next, GM said it expected to take a pre-tax charge of U$D 400m in the first quarter for the same reason, cancelling out the U$D 327m it made in South America during 2013. Both companies took the hit because they could not cash out the Bolívares they make in Venezuela at the official exchange rate of 6.3 Bolívares to the dollar. Both have said they will now use one of the central bank’s alternative FX platforms, SICAD 1, where the rate is about 10.7. This adds to an already grim outlook for car makers in Venezuela. Manufacturers are operating far below capacity for lack of components and supplies. TOYOTA has simply stopped producing, while FORD said in January it was cutting output. “That market is basically on ice at the moment,” says Bob Shanks, Ford’s chief financial officer. According to the latest data from Venezuela’s chamber of carmakers, CAVENEZ, Ford produced 292 units and GM 232 in February. In total, 1,425 cars were produced that month, compared to 5,817 in February 2013. When it comes to sales, merely 817 cars were sold in the country in February – a 90% drop from the previous year. Only 3,424 vehicles were assembled in January-March. The sector shrunk 76.08% compared with the same period in 2013, when production totaled 14,316 vehicles. (Financial Times, http://blogs.ft.com/beyond-brics/2014/04/04/venezuelas-fx-regime-wiping-out-car-markers/#ixzz2yCkOjITR; El Universal, http://www.eluniversal.com/economia/140410/car-manufacturing-in-venezuela-plunges-7608-as-against-2013)

The scarcity index rose to 31.03% in March for 58 staples that make up the basic food basket, according to the reputable Teachers’ Federation’s Documentation and Social Analysis Center (CENDAS-FVM, in Spanish). The report also shows that other staples other than food are also scarce, such as soap, detergents, dishwashers, toilet paper, bleach, diapers, softeners and napkins. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=38838&idc=2)

Consumer product inventories down to 0.6 months, says Pedro Manosalva, of Nielsen Venezuela, who is chairman of the VENAMCHAM Consumer Products Committee. Shortages are due to FOREX restrictions, so there will be an "additional impact" on scarcities and recovery will not be immediate. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140409/inventarios-de-productos-masivos-estan-en-06-meses)

Economy & Finance
Venezuela hits 18-year inflation record, the IMF predicts 133% in 2016, further contraction
Venezuela is expected to see an inflation rate of 50.7% this year, the International Monetary Fund estimates. That will be an 18-year high, according to a LATINVEX analysis of IMF data. However, the IMF predicts it will get even worse in Venezuela. Two years from now, the country should see a whopping 133.4% inflation, the fund says. That would mark an all-time high in the South American country, beating the previous record from 1996 of 99.9%. This year’s estimated inflation in Venezuela will be the world’s highest for the second year in a row. The IMF also predicts Venezuela's economy will continue to deteriorate and will shrink by 0.5% this year, amid "high uncertainty". (LATINVEX, http://latinvex.com/app/article.aspx?id=1331; and more in Spanish: El Universal, http://www.eluniversal.com/economia/140409/fmi-preve-mayor-depresion-economica-en-venezuela)

Trade has slowed down by 17.4%, according to the commercial and business survey responded by merchants for the 4th quarter and presented by CONSECOMERCIO. Also, it shows 40.2% of the merchants polled indicate inventories have been reduced. They point out their main problem is inflation, followed by insecurity, lack of FX for imports, price regulations and disloyal competition from the informal sector. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=38846&idc=3; El Universal, http://www.eluniversal.com/economia/140410/survey-909-of-trade-sector-in-venezuela-was-not-sold-dollars-in-2013)

U$D 15 billion foreign credit freeze reported
Affiliates of the Venezuelan American Chamber of Commerce (VENAMCHAM) report frozen dividend repatriations are around U$D 10 billion for the past 5-6 years. General Manager Carlos Tejera also reports companies now owe their headquarters or foreign suppliers "around U$D 13 billion", and the amount has grown over the past few months and credit has dried up. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140409/empresas-pierden-linea-de-credito-por-15-mil-millones; El Mundo, http://www.elmundo.com.ve/noticias/actualidad/noticias/bajo-crecimiento-y-alta-inflacion-proyectan-analis.aspx; http://www.elmundo.com.ve/noticias/economia/empresas/deuda-de-empresas-afiliadas-a-venamcham-alcanza--1.aspx)

DATOS: 77% are purchasing half the food they need
DATOS polling company general manager Luis Maturén reports that their latest survey shows crime, the high cost of living and scarcities are the main problems facing Venezuela's population. The report also shows 77% say they can purchase less than half of their needs. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140409/77-de-la-poblacion-dice-que-compra-la-mitad-de-los-alimentos; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/a-77--de-los-venezolanos-no-le-alcanzan-los-ingres.aspx)

Politics
Maduro and opposition in landmark crisis talks
President Nicolas Maduro has met opposition leaders in crisis talks aimed at quelling weeks of protests. Maduro met his bitter rival, opposition leader Henrique Capriles, for six hours. More talks are scheduled for Tuesday. The meeting was brokered by foreign ministers from South American nations, and the Vatican. Maduro told the meeting that there would be no deal with the opposition. "There are no negotiations here. No pacts. All we're looking for is a model of peaceful coexistence, of mutual tolerance," he said, and called on the opposition to renounce violence. Capriles, who was narrowly defeated in last year's presidential election, insisted that the opposition did not want a coup against the government. "We don't want a coup d'etat. We don't want an explosion on the streets," he said. "Either this situation changes or it bursts. I hope it changes because I don't want violence." Capriles also accused Maduro of being disrespectful to the Venezuelan people: "How are you going to ask the country to accept you if you call half the country fascists or you threaten them?" he asked. "I think it is very difficult to govern a country where half the people are against you." The talks were broadcast live on television. Pope Francis sent a letter giving his support to the talks: "I urge you not to get stuck in the conflict of the moment but open yourselves to one another to become true builders of peace," the Roman Catholic leader said, in a letter read out at the meeting. . 11 opposition and 8 government representatives spoke. Participants traded accusations and demands, including amnesty for political prisoners, economic solutions, and an explicit condemnation of all violence. Henry Ramos-Allup, Secretary General of the opposition AD party said that today Venezuelans arose with "another vision of the country", which gives the public a full vision of both sides so that they can evaluate. He also said students will also enter into discussions with President Maduro to state their grievances. There will be follow up meetings and Vice President Jorge Arreaza, Caracas Mayor Jorge Rodríguez and Foreign Minister Elías Jaua were designated as a committee to continue talks with representatives of the Democratic Unity Conference, the major opposition coalition. Key opposition leaders who led protests, including the imprisoned Leopoldo López, of Popular Will; Antonio Ledezma, of the Brave People´s Alliance; María Corina Machado, and major student leaders, refused to attend, demanding the release of all political prisoners as a precondition.  A local court is scheduled to decide on May 8th whether to try Leopoldo López, who is currently being held without bail in a military prison. (BBC; and more in Spanish: NTN24, http://www.canalntn24.com/node/128374/; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/gobierno-y-oposicion-se-sentaron-a-dialogar.aspx#ixzz2yZZ5pR3Y; Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/arreaza-rodr%C3%ADguez-y-jaua-integrar%C3%A1n-una-comisi%C3%B3n-enlace-para-dialogar-mud; El Nacional; http://www.el-nacional.com/; El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/140411/el-8-de-mayo-se-decidira-si-se-enjuicia-a-leopoldo-lopez; Infolatam)

Lula advises Maduro to "call a coalition government", Maduro retorts is able to rule
Former Brazilian president Luiz Inacio Lula da Silva has advised President Nicolás Maduro to call a coalition government to reduce political tensions between supporters and opponents of this regime. "Maduro should try to tone down public debate so he can devote his time entirely to governance, establish a coalition policy, construct a minimum program and diminish tensions. I am pushing for a negotiated solution because Venezuela is strategic to Brazil." Maduro promptly replies he is capable of ruling alone. (El Universal, http://www.eluniversal.com/nacional-y-politica/140409/lula-exhorta-a-maduro-a-convocar-un-gobierno-de-coalicion)

Washington will not accept a new Venezuelan ambassador for now
The United States said on Wednesday it will not consider Caracas' proposal to send a Venezuelan ambassador to Washington, terming it a "distraction" from the country's problems, which are internal rather than in Washington-Caracas bilateral relations. Roberta Jacobson, Assistant Secretary of State for Western Hemisphere Affairs, told the US Congress that: "We feel very, very strongly that this is not about the bilateral relationship between the US and Venezuela, and therefore we are not taking action to allow a Venezuelan ambassador in the US yet". (El Universal, http://www.eluniversal.com/nacional-y-politica/140410/washington-not-to-approve-new-venezuelan-ambassador-for-now)


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.