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, November 12, 2010

November 12th, 2010

Economics, Trade & Business

Venezuela bought more from the U.S. in the third quarter
Venezuela's imports from the United States increased 28% in the third quarter of this year, registering a total of $ 2,668 million, compared with the same period in 2009, when it reached $ 2,081 million. In the case of exports, the figures showed a rise of 3.85% with a total of $ 8,555 million, compared with $ 8,237 million in 2009, according to the Department of Commerce of the United States. With these figures, the trade relationship between the two countries during that period grew 8.7% to reach an amount of $ 11,223 million in 2010, compared with $ 10,318 million last year. (El Mundo, 11-11-2010;

Increase in food prices up by 33.7 percent in one year
The acceleration in food price inflation puts pressure on Venezuela's Consumer Price Index (CPI), which increased by 1.5 percent at the end of October compared with 1,1 percent increase in September, according to data provided by the Central Bank of Venezuela (BCV). After a slight change (0.2 percent) in September, the price of foodstuffs gained strength and rose by 1.6 percent in October. The government did not decree any adjustment in the price of regulated items. As a result, food products recorded an annual variation of 33.7 percent, whereas the cumulative variation reached 29.5 percent. This is the group of goods that mostly impacts general prices. (El Universal, 11-10-2010;

Venezuelan food producer Polar to invest in yoghurt market
Venezuela's food giant Alimentos Polar will team up with Spanish dairy group Leche Pascual to invest in the yoghurt market through the joint venture Pascual Andina C.A. Pablo Baraybar, business director of Alimentos Polar, said they plan to invest VEB 450 million (USD 105 million) in a new yoghurt plant expected to be completed in the first quarter of 2012. (El Universal, 11-10-2010;

PDVSA authorized to trade bonds in state-run market
Venezuela’s Finance Ministry will allow Petróleos de Venezuela, S.A. bonds to be traded in the state- run Public Bond Market in an effort to expand access to local debt securities. PDVSA was given authorization by the Securities Superintendent to have $3 billion of bonds maturing in 2017 and sold on Oct. 25 traded on the exchange, according to a resolution published today in the Official Gazette and dated Oct. 8. It’s the first company that’s received permission to operate in the market. (Bloomberg, 11-10-2010;

Conindustria concerned about the reduction in firms in Venezuela
The president of Conindustria, Carlos Larrazabal said Thursday figures show there has been a marked reduction of companies in the country. Speaking to Union Radio, he said that "INE 1999 figures show that more than 11.200 industries were based in Venezuela and today the figure is less than seven thousand companies." "58% of small businesses today are not even able to invest in operational maintenance and only 20 percent of large firms are investing to increase" he said. (El Mundo, 11-11-2010;

Sidor two-day strike affects steel production
Siderurgica del Orinoco’s two-day strike at Venezuela’s biggest steel mill is affecting the supply of steel this week to the national market. Union workers blocked the entrance to Sidor, as it is known, on Nov. 8 and 9, Oliveira said. The workers were protesting the non-payment of bonuses and demanding their contracts be renegotiated. Oliveira said Sidor is operating at 75 percent of its capacity following an electricity crisis earlier this year in which factories were forced to cut production to save energy. (Bloomberg, 11-10-2010;

Central Bank of Venezuela introduced the "Gold Book"
The Central Bank of Venezuela will close the exhibition "Golden Millennium" with the baptism of the Golden Book "an encyclopedic text written by researchers and specialists from various disciplines which puts the reader in the context of the gold mining activity in the country and the world. This volume edited by BCV, aims to raise awareness on the sustainable exploitation and rational commercialization of this natural resource with immense potential for the harmonious development of the Venezuelan economy," the BCV said. (El Mundo, 11-11-2010;

CAF approves resources of over USD 1500 million to Venezuela in 2010
By early 2010, the Corporación Andina de Fomento (CAF) announced its intention to grant loans to Venezuela by a higher order than U.S. $ 1 billion in order to promote projects in electricity, mass transportation and social infrastructure mainly. To comply with that plan, in May, the multilateral organization gave the nation $ 500 million for the Program for Strengthening National Electric System was growing Venezuelan authorities and whose goal is to add 16,195 megawatts of generation for 2015. (Conapri, 11-08-2010;


Castro and Chávez strengthen ties in four-hour meeting
Former Cuban President Fidel Castro congratulated Hugo Chávez for “the warm and emotional speech” delivered by the Venezuelan President during the tenth anniversary of the signing of the Comprehensive Cuba-Venezuela Cooperation Agreement. (El Universal, 11-10-2010;

Region ignoring Venezuela coup threats
What a sham! While the Venezuelan military announces it will not accept an opposition victory in the 2012 elections, thousands of people are dying in Mexico's drug wars and Haiti is suffering from a deadly cholera epidemic, the Organization of American States -- supposedly in charge of addressing the region's biggest problems -- is nowhere to be seen. (Miami Herald, 11-11-2010;

The loser advances
The National Assembly has been revving up its engines in order to consolidate the Castro-communist project. Its haste is due to the fact that its absolute power expires in January 2011 thanks to the will of the people who voted against revolutionary hegemony on September 26. With this last-ditch effort, the redder-than-red parliamentarians will complete the Chavista project’s legal network with five laws relating to the People’s Power or Branch. Naturally, they will not approve them before mounting a show of taking them out on the street to “consult” with “their people.” (Veneconomy, 11-11-2010;

Pollster: Venezuelan government weighs adoption of Marxist model
In the post-election political scenario, the new balance of power has led President Hugo Chávez to set a strategy based on the display of force to strengthen the public's perception of Chávez's invincibility. This was the view expressed by Luis Vicente León, director of polling firm Datanálisis, during the forum entitled 2011 Outlook, hosted by consulting firms Ecoanalítica and Metroeconómica. "The president's role is to make clear who is in charge, regardless of key players such as Major General Rangel Silva," León said. (El Universal, 11-10-2010;

Transport & Logistics

Ensure that the office of Puerto Cabello is inefficient
In the private sector say that continuing delays in the nationalization of goods at the port of Puerto Cabello. Elsa Gutierrez, president of the Bolivarian State Ports (Bolipuertos) said on Tuesday they had managed to improve the management of the office of the country's main port. This version contrasts with the importing and exporting companies operating in Puerto Cabello. "They lowered their times but not for improved operations, but it has lessened the burden," said a source close to a customs agent. (El Universal, 11-12-2010;

Petroleum & Energy

A Nuclear-Electric program law was approved by the National Assembly yesterday. The agreement signed by Venezuela and Russia includes the construction of a nuclear reactor for the peaceful use of nuclear energy. Venezuela signed the Nuclear Non-Proliferation Treaty on June 23, 1978 and signed a cooperation agreement with Russia in November 2008 to develop nuclear projects for peaceful purposes. (Veneconomy, 11-10-2010;

Venezuelan oil exports fell 4.3% in October
Venezuela's oil exports fell 4.3% in October, before the decline in sales of crude oil and affected by faults in the circuit refiner, said the Ministry Energy. External sales averaged 2.3 million barrels per day (bpd), down from 2.4 million bpd in the same month last year, affected mainly by falling 27% to 324,867 bpd in the offices of products. External sales of conventional oil also showed a decline of 6.9% to 1.5 million bpd, while the improved oil Orinoco belt maintained its trend of rising year by averaging 366,474 bpd, an increase of 38%. (El Mundo, 11-11-2010;

Drilling unit Petrosaudi Saturn arrived in Venezuelan waters
Past Monday, the drilling unit Petrosaudi Saturn arrived in Venezuelan waters. Said vessel was recently upgraded and overhauled for offshore drilling and can reach up to 7,000 meters deep. A press release from the Energy and Oil Ministry explains that said vessel will replace the semi-submersible platform Aban Pearl, which strengthens the gas revolution boosted by the Venezuelan state-run oil company PDVSA and it is aimed to satisfy domestic gas needs. (AVN, 11-11-2010;

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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