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, November 23, 2010

November 22th, 2010

Economics, Trade & Business

Public sector imports up 47 percent; private sector's down 22 percent
In a report on Venezuela's economic activity at the end of the third quarter, the Central Bank of Venezuela (BCV) stressed there was an increased flow of foreign exchange throughout the different economic sectors during the period. However, there was only a partial recovery. According to accumulated figures, private imports declined while government procurement abroad rose. Venezuelan public sector imports amounted to USD 5.4 billion in the first nine months of the year, an increase of 47 percent compared to the same period last year, when they reached USD 3.9 billion, according to data released by the BCV. By contrast, Venezuela’s private sector imports amounted to USD 17.9 billion, a 22 percent fall compared to 2009, when they amounted to USD 22.9 billion. (El Universal, 11-22-2010;

40% private sector imports fell in 2010
The private sector imports so far in 2010 dropped 40% compared with the previous year, while in the public sector have increased since the National Government continues to bring food and other products, said Avendaño Franco, executive director of the Chamber of Commerce of Puerto Cabello. Customs specialist stressed that the disparity of the dollar and other actions to determine the trade flow is not equal to three years ago. Avendaño stressed that the difficult access to foreign exchange has resulted in an imbalance in the purchasing power to the supply and demand. Regarding exports, the business leader said that not happening, because the country is not encouraged private sector production permanently. (Notitarde, 11-22-2010;

Food imports will reach $ 6,500 million in 2011
The bill for food imports around the world could surpass one trillion dollars in 2010, according to the latest Food Outlook report of the Food and Agriculture Organization (FAO, for its acronym in English). Venezuela is no exception to this upward trend that could grow in 2011. The expert in food and agriculture, Carlos Machado Allison, estimated that by the end of this year, the value of foreign food purchases could come close to $5,500 million dollars, after 2009 closed at about $5,000 million, according to his calculations. (El Mundo, 11-22-2010;

Rusoro plans to increase gold production in Venezuela
Rusoro Mining, a Russian-Canadian gold producer and explorer, expects gold production in two Venezuelan mines to amount to 20,000 ounces in October and November, it said on Monday. Rusoro Mining operates several rich gold deposits in the southeastern state of Bolívar, particularly the Isidora mine and Chocó 10 mine, which is one of the most productive deposits. (El Universal, 11-22-2010;

Venezuela steelmaker sees improved output for 2011
Venezuelan state steelmaker Sidor hopes to double production to nearly 4.5 million tonnes in 2011 thanks to a recovery in the South American nation's power sector, the company's president said on Saturday. Carlos D'Oliveira was quoted saying Sidor should produce 98 percent of its annual capacity of 4.5 million tonnes next year due to the recovery of the hydro-electric sector and new thermoelectric generators. (Reuters, 11-20-2010;

Venezuela facing currency devaluation
Venezuela's recession-hit economy is on the mend but the ravages of drought, nationalizations and slow growth have combined to make a further devaluation of the bolívar inevitable in 2011, industry analysts said. Figures cited by the International Monetary Fund and industry experts suggested a formal revision of the bolívar-U.S. dollar parity would make official what is already in effect in Venezuela's burgeoning informal economy. Venezuela last devalued its currency in January 2010. (UPI, 11-19-2010;


Chavez demands action against owner of TV channel
President Hugo Chavez stepped up his threats against Venezuela's only remaining opposition-aligned television channel on Saturday, calling its owner a fugitive criminal and accusing him of conspiring against his government. Chavez demanded that authorities including the attorney general and the Supreme Court take action in a pending criminal case against Globovision owner Guillermo Zuloaga, who fled the country earlier this year after a court issued an arrest warrant. (Washington Post, 11-20-2010;

Transport & Logistics

Yellow alert for Venezuelan coasts
The National Institute of Aquatic Spaces (INEA)’s General Manager Cristóbal Figueroa decreed a yellow alert for the Venezuelan coasts due to the atmospheric instability over the Caribbean Sea. Navigation for ships of less than 150 gross tonnage units in Nueva Esparta, Falcón and Anzoátegui has also been restricted. (Veneconomy, 11-22-2010;

Port activity decreases in the port of La Guaira
Movement in the terminal port of La Guaira, Venezuela has continued to decline. According to data released by the Central Coast Ports Company (PLC), until last October, the terminal had received some 583 ships, while in the same period last year, La Guaira received 641 motorboats (container, general cargo, passenger ships and bulk carriers). In percentages, the numbers represent a decline of 9% with respect to 2009. However, on the tenth month of the year, the port handled 67 ships (more than eight ships in September and three more than the same month in 2009). In terms of TEUs, 35,763 were mobilized. The cumulative year to date shows 265,553 TEUs have been moved. Likewise, the numbers indicate that in the similar period of 2009, the port had mobilized 320,845. (Mundo Marítimo, 11-19-2010;

Petroleum & Energy

Eni and PDVSA agreed investment of $ 17,000 million and operating refinery
Italian oil company Eni and Petróleos de Venezuela agreed on terms for the exploitation of the Junín 5 Block of the Orinoco Belt and the construction of a refinery through a $ 17,000 million investment. In the joint venture, called PetroBicentenario, PDVSA will have 60% and Eni 40%, the minister of Energy and Petroleum Rafael Ramírez said during the signing of the agreemnt at PDVSA headquarters. Eni CEO Paolo Scaroni said the agreement makes "Venezuela a strategic partner” while Ramirez, said it is the largest investment between Italy and Venezuela. (El Mundo, 11-22-2010;

State public utility study all oil operations
The government intends to further accentuate the control over oil and gas activity by declaring all oil operations in the country of "public interest and public or social utility", as envisaged in the draft Law for the Protection of the National Hydrocarbons Sector. This draft, which is under study by the National Assembly and that could be discussed before the end of this year, states the "principles and mechanisms that ensure the protection and safeguarding of assets and activities of the national oil and gas sector." (El Universal, 11-22-2010;

PDVSA sys there are 220 operational drills
Venezuela has about 220 active oil drills, slightly above the official figures reported last year, reported Saturday the vice president of exploration and production of state-owned PDVSA. In its financial and operational report of 2009, Petróleos de Venezuela (PDVSA) had reported 208 active rigs. "Currently there are 220 active rigs in our country, and fifteen ready to enter service soon," said Eulogio Del Pino in a statement. The numbers of oil production and drilling assets reported by Venezuela may differ from agencies like the International Energy Agency and OPEC itself, of which Venezuela is a member. (Ultimas Noticias, 11-20-2010;

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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