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, February 4, 2011

February 2nd, 2011

Economics & Finance

CONINDUSTRIA reports 623 "attacks" on private businesses over the past nine years
From January 2002 to January 2011, 623 attacks on business property have been recorded, as estimated by the Venezuelan Council of Industries (CONINDUSTRIA). "Between 2005 and 2005, 14 attacks were perpetrated on private property; one in 2006; 126 in 2007; the following year, it lowered to 25. In 2009, there were 139 events; 287 in 2010 and thus far in 2011, the number is 31 events," CONINDUSTRIA broke down in a press release. Based on this count, seizures and State appropriation of formerly private assets have escalated over the past two years. "Interestingly, 70 percent of these records have been generated in 2009-2011." (El Universal, 02-02-2011;

A new Government sponsored Stock Exchange will rival the private Caracas exchange
Planning & Finance Minister Jorge Giordani has been promoting the new public stock exchange that opened for business last Monday. “It’s a new kind of financial system”, he said, “aimed at uniting savers with investors working in the productive field”. The Bicentenary Public Stock Exchange was established after the government overhauled the highly speculative financial system operating through brokerage houses and a private stock exchange that continues to exist. Savers are now able to operate at a fixed or variable rate on the new market that is transparent and regulated by the State. (VHeadline, 02-02-2011;

Venezuelan Government indebtedness to local banks rose by 50% during 2010
Despite an average oil price – the main source of revenue - pegged at $ 72 per barrel during 2010, the Venezuelan Government required additional funding for its expenditures and resorted to borrowing locally. More information in Spanish. (El Universal, 04-02-2011;

Strike shuts down HEINZ plant
A plant run by HEINZ in the state of Carabobo, north central Venezuela was shut down by workers, who demanded the signing of their collective bargaining agreement. "The company believes that we are still living the era of Juan Vicente Gómez (a Venezuelan ruler from 1908 to 1935) and believes that workers are going to live on VEB 10 or 15 a day (USD 2.30-3.50)," said union leader Edison García. Meanwhile, in a statement, HEINZ declared that "these people have not only started an illegal strike, but also they have prevented workers from entering the facilities. Therefore, production of ketchup, baby food, jelly and other key products in the Venezuelan market has been halted." (El Universal, 01-02-2011;


OIL FUTURES: Crude Falls On Dollar Strength; Egypt In Focus
Crude oil futures fell Thursday as the U.S. dollar rallied, even as traders remain focused on escalating violence in Egypt and the prospect of supply disruptions. Light, sweet crude for March delivery settled 32 cents, or 0.4%, lower at $90.54 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded down 58 cents, or 0.6%, at $101.76 a barrel. Oil prices turned negative on a stronger U.S. dollar against the euro, after European Central Bank President Jean-Claude Trichet indicated that the central bank isn't ready to raise interest rates. (The Wall Street Journal, 03-02-2011;

Reports indicate PDVSA is buying oil from third parties to meet commitments
Purchase of crude oil and byproducts to third parties by PDVSA increased to $14,620 million at the end of the first semester of 2010 from $9,915 million in the same period the year before, according to data from its financial statements. (Veneconomy, 03-02-2011;

Venezuela to supply petcoke to Turkey in exchange for housing construction
Venezuela has proposed to supply Turkey with petcoke in exchange for the construction of 5,000 to 10,000 houses in Venezuela's eastern state of Anzoátegui. Pedro León, the director of state-run oil company Corporación Venezolana de Petróleo (CVP), said that the proposal is based on a bilateral agreement signed by the Minister of Energy and Petroleum Rafael Ramírez and president of state-run oil company Petróleos de Venezuela SA (Pdvsa), Rafael Ramírez, in a recent visit to Turkey. (El Universal, 02-02-2011;

Chavez predicts the Government food program will increase monthly distribution to 300,000 tons
Venezuelan President Hugo Chavez said that the National Government seeks to increase the monthly food distribution from 170,000 tons up to 300,000 tons, by means of the state-run marketing network, made by grocery stores Mercal, PDVAL and Abastos Bicentenarios. President Chavez spoke during a visit to the facilities of a PDVAL grocery store in Caracas, amid celebrations of the 12th anniversary of the Bolivarian Revolution. He explained his administration is working on an extraordinary plan in food matters. “I have already approved resources for plans to expand the mission. This year, we will increase food distribution from 170,000 tons to 300,000 tons to give more life to people.” (AVN, 02-02-2011;

Chavez says 176,000 farmers have enrolled in Mission Agro Venezuela
Venezuela's President Hugo Chávez reported that 176,000 growers have been enrolled in Mission Agro Venezuela, according to the latest cut-off estimated midday on Wednesday. "Thanks to all, Mission Agro Venezuela is a major success, because we ought to produce what we consume, diminish import, increase domestic production and then even export," President Chávez said. (El Universal, 02-02-2011;,000-g_02A5098653.shtml)

Logistics & Transport

Import costs increase because of irregularities at BOLIPUERTOS
Importers have been experiencing a significant increase of their administrative and storage costs within customs as a result of the operational irregularities at La Guaira sea port, which is being managed by Bolivariana de Puertos (BOLIPUERTOS) since mid-2009. (Veneconomy, 01-02-2011;

Imports decline as importers face uncertainties on price adjustments
The flow of bulk cargo that arrives through the port of Puerto Cabello ebbed during the first month of 2011. More information in Spanish. (El Universal, 04-02-2011;


Venezuela: Chávez in re-election bid after 12 years in office
President Hugo Chávez, marking his 12th anniversary in power, said he was prepared to campaign for six more years in office. In a televised speech, Mr. Chávez said that “the battle has begun” for the election in 2012. And in visits to a school and a state-run supermarket, he promoted his programs and agenda. He also apologized for errors; saying much remained to be done as he sought to lead Venezuela toward socialism. While the president is facing problems like rising crime and 27 percent inflation, the opposition has yet to select a candidate to run against him. (The New York Times, 02-02-2011;

Polling firm: Only 23 percent of respondents support a Chávez reelection in 2012
Luis Vicente León, the director of Caracas-based polling company DATANÁLISIS, said that bimonthly polls conducted by his firm show that President Hugo Chávez's popularity still holds at 50 percent. León added that although pro-Chávez votes dropped in regional elections, his popularity has increased again as the ruling party is implementing an unwavering and improved political campaign. The economist stressed that Chávez's campaign is deployed in mandatory nationwide radio and TV broadcasts, his weekly talk show “Hello, President”, billboards, testimonial TV ads about the president's performance. Additionally, the Venezuelan president is implementing a "much more populist strategy that highlights the gap between the rich and the poor -a strategy that has helped him boost people's support and polarize Venezuelan society." According to the poll, 23 percent of respondents support Chávez's reelection. (El Universal, 02-02-2011;

Reuters projects key political risks in Venezuela
According to Reuters, political disputes over when President Hugo Chavez will give up decree powers, jockeying ahead of the 2012 presidential election and a weak economy are the main political risks to watch in Venezuela.
Chavez is expected to use his decree powers for more nationalizations. He has already said more private land needs to be turned over to build houses for the poor, and has warned banks that they must help finance his social programs or face expropriation. A new banking law passed in December made takeovers in the financial sector easier. (Reuters, 01-02-2011;

Chávez promises more personal safety for Venezuelans
Venezuela's President Hugo Chávez said on Wednesday that in the same way that his government is committed to provide food, housing and education to every Venezuelan he wants to provide security to his fellow citizens. "We must ensure that every Venezuelan walks in the streets without fear of being mugged, being shot or being hit," Chávez said. "We have been making significant progress" in personal security,” he said. (El Universal, 02-02-2011;

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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