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.

Monday, October 11, 2010

October 11th, 2010

Economics, Trade & Business

Osorio: Polar and Cargill must go to the state

"Oligopolies do not ensure food security in the country and the Bolivarian government has seeking solutions to this problem for  11 years. There are two opposing extremes: the socialist and capitalist. Yankees’ attacks through their domestic lackeys have failed to halt the advance of the revolutionary laws. The Bolivarian government has made progress in these 11 years, despite capitalist and imperialist efforts." The speaker is not a stale leader of the radical left, but rather a general of the National Bolivarian Armed Forces. The People's Minister for Food, Carlos Osorio, is an example of the new era in Venezuela, in the process of building socialism. Companies like Polar and Cargill, as happened with Agroisleña should be in the hands of the state, said Osorio. The new coalition of forces in the National Assembly to be installed on January 5, 2011, will not be an impediment to the progress of the Revolutionary Government. (Correo del Orinoco, 10-11-2010;

Venezuela has seized about 185 industries in 2010
Carlos Larrazábal, the president of the Venezuelan Confederation of Industries (Conindustria), said that the Venezuelan government has seized at least 185 manufacturing companies in 2010, excluding firms in the agriculture sector. "We are concerned that the Venezuelan government will continue to seize companies without complying with Article 115 of the Constitution," Larrazábal said about the recent seizure of Agroisleña, Venoco and Fertinitro. (El Universal, 10-11-2010;

Venezuela nationalizes Koch, Eni fertilizer plant
Venezuela's President Hugo Chavez nationalized a large U.S. and Italian-owned fertilizer factory on Sunday, just days after vowing to radicalize his state-led revolution in the aftermath of elections last month. The government will take over Fertinitro, one of the world's main producers of nitrogen fertilizer and part-owned by private U.S. company Koch and Saipem a subsidiary of Italy's Eni, Chavez said. During 12 years in power, the 56-year-old former soldier has put large swathes of the OPEC member country's economy into state hands. On Sunday, he also announced the nationalization of Venezuelan motor lubricants company Venoco. (Reuters, 10-10-2010;

Venezuela's business sector asks top court for ruling on private property
Venezuela's private business association Fedecámaras will request that the Supreme Tribunal of Justice (TSJ) issue a ruling on the status of private property, said Noel Álvarez, the president of the Federation of Trade and Industry Chambers (Fedecámaras). "We are going to file an action with the TSJ for it to determine whether private property has been infringed or not," the business leader told private TV news channel Globovisión. (El Universal, 10-11-2010;

Venezuela's government increases control over agricultural and industrial sectors
Venezuelan state policy to control the means of production was reinforced after President Hugo Chávez signed a decree expropriating Spanish farming supply firm Agroisleña, which provided supplies to 70 percent of the country's farmers before it was seized by the government. With  the seizure of Agroisleña, which was renamed Agropatria, the Venezuelan government aims at expanding and tightening the grip over food production. The first seizures of lands, which now total about 2.9 million hectares (7.17 million acres), were carried out at the end of 2004 with a series of expropriation decrees of farms located in the central state of Cojedes. (El Universal, 10-11-2010;

Nationalized agroindustry to offer products with discounts between 40 and 60%
The Venezuelan State company Agropatria (new name for the recently nationalized Agroisleña) will offer agricultural products at discounts between 40 and 60 percent, compared to the prices of said company when it was under private control. Agroisleña was nationalized on October 4 to put the company at the disposal of country’s agricultural development. During his weekly show “Alo, Presidente,” the Venezuelan Head of State ordered the reduction of 49.3% of the prices of 12 fertilizers, 43% the prices of 260 agrochemicals, and an average of 41.7% the prices of black beans, corn and rice seeds. (AVN, 10-11-2010;

National Statistics Institute highlights Venezuelan inflation decreasing tendency
The President of the National Statistics Institute (INE) Elias Eljuri highlighted on Monday a deceleration of the inflation rate in Venezuela, estimating that the indicator will finish 2010 at about 27%, a figure well below the 40% predicted by “opposition” analysts. He reiterated that the inflation rate of 1.1% in September reflects this decreasing tendency and represents a significant reduction compared to the rate of 2.5% obtained in the same month last year. (AVN, 10-11-2010;


Chavez backs China over Nobel for jailed dissident
Venezuelan President Hugo Chavez expressed solidarity with China's government Sunday over the awarding of the Nobel Peace Prize to a jailed Chinese dissident. He suggested the prize should not have gone to Liu Xiaobo, who has drawn praise from Western governments as an advocate of gradual political change without any violent confrontation with Chinese leaders. "This (Liu) is like Obama, the other peace prize," Chavez said. (Miami Herald, 10-10-2010;

The wave continues to swell
Since the appearance of the computers belonging to Raúl Reyes in 2008, the wave of compromising evidence indicating that the Hugo Chávez administration has ties with the narco-terrorist group, the Revolutionary Armed Forces of Colombia (FARC), has not ceased to grow. Now, this year, new facts have emerged that would seem to corroborate the high level of collaboration maintained by the Venezuelan Government not only with the FARC, but also with terrorist groups such as the National Liberation Front (ELN), and Euskadi Ta Askatasuna (ETA). On July 22, Álvaro Uribe presented accusations against Hugo Chávez before the International Criminal Court (ICC) and filed a lawsuit against the Bolivarian Republic of Venezuela before the inter-American Court of Human Rights (IACHR). (Veneconomy, 10-11-2010;

Venezuelan opposition reinvents itself
Venezuelan opposition leaders have realized that unity works. They support this idea and they highlight this fact from their different political views. Ramón Guillermo Aveledo, the executive secretary of the Democratic Unified Panel (MUD), says that it is the best course to follow in the coming years. "Unity has proven successful. Unity -as people demand and as political success requires - has been endorsed by the successful election results," he said. According to Aveledo, they are now faced with a new challenge: proposing a real agenda to both slums and affluent residential areas. Such agenda should include "the fight against crime and against the high cost of living and the protection of private property." (El Universal, 10-08-2010;

ETA members claim they were trained in weapons use in Venezuela
The government of Venezuela's President Hugo Chávez has decided to launch an investigation into the activities of ETA activist Arturo Cubillas Fontán after it emerged that he provided weapons training to Xabier Atristain and Juan Carlos Besance, two alleged members of Basque terrorist group ETA, in Venezuela in 2008. (El Universal, 10-08-2010;

Petroleum & Energy

Venezuela approves China's stake in Orinoco Oil Belt
Venezuela has approved China's stake in a joint venture to tap up to 400,000 barrels per day of extra-heavy crude oil in the Orinoco Oil Belt, under an agreement published in Venezuela's Official Gazette on Monday.
The Venezuelan government has negotiated several oil interests in the Junín block with companies from China (CNPC), Russia (Rosneft), Vietnam and Italy (ENI) after it completed a successful bidding of two multimillion projects in the Carabobo block of Venezuela's Orinoco belt.
(El Universal, 10-11-2010;

Domestic gas market requires over 2,000 million additional cubic feet (MMcf) -excluding what is demanded by the oil industry-  to satisfy domestic demand. This means production would have to double. PDVSA consumes 71% of the 7,000 MMcf a day of national production. (Veneconomy, 10-11-2010;

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.

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