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, September 2, 2011

September 02nd, 2011


Economics & Finance

Chavez says speed up takeover of Irish company's land
Venezuelan President Hugo Chavez urged his agriculture minister on Wednesday to speed up the government takeover of land owned by Ireland's Smurfit Kappa in Venezuela. In 2009, Chavez ordered the seizure of a eucalyptus tree farm owned by Smurfit Kappa. Now he says: "We have to take the last square meter of land from Smurfit. ... Let's move more quickly, that's an order". It was not immediately clear if Chavez's comments suggested he planned to seize more land belonging to Smurfit Kappa or accelerate the takeover of the tree farm. The land seizure ordered two years ago involved 3,700 acres, which analysts said represented a small part of the company's landholdings. The Agriculture Minister said Smurfit Kappa still owned 29,650 acres. (Reuters, 08-31-2011; http://www.reuters.com/article/2011/09/01/us-venezuela-chavez-smurfit-idUSTRE7800HE20110901)

Expropriation of Smurfit Carton de Venezuela made official
The order issued on Tuesday by President Chavez to accelerate takeover land in possession of the Smurfit Kappa became official today. The Minister of Agriculture now says the company has 12 000 remaining hectares left in Portuguesa and Lara States. More information in Spanish: (Tal Cual, 09-02-2011; http://www.talcualdigital.com/index.html)

Local industry barely using 52.77% capacity
The industrial sector remains stagnant and barely used 52.77% of installed capacity, according to a joint survey taken ​​by the Venezuelan Confederation of Industries (CONINDUSTRIA) during the second quarter 2011. Although the national economy has registered some growth, use of installed capacity remains virtually the same as last year, when the economy was mired in recession. Their poll indicated "There were no significant changes over the same period last year". More information in Spanish: (El Universal, 09-02-2011; http://www.eluniversal.com/2011/09/02/capacidad-utilizada-de-las-industrias-apenas-llega-a-5277.shtml)

Private exports fell 42% over the past 12 years
Exports from the non oil private sector fell 42% over the past 12 years, mainly due to exchange controls and negative incentives to domestic manufacturing, along with strengthened imports. Currency overvaluation has turned Venezuela more expensive, which makes it difficult to compete in the international market, according to Francisco Mendoza, en expert on exports. Central Bank statistics show that the level of non-oil exports remains exactly the same as 1999, when U$D 1.09 billion were sold abroad and imports amounted to U$D 1.6 billion. More information in Spanish: (El Nacional, 09-02-2011; http://www.el-nacional.com/www/site/p_contenido.php)

International reserves closed at U$D 29.066 billion in August
By the end of August, international reserves were back up to U$D 29.066 billion, according to the Central Bank of Venezuela (BCV), despite transfers of U$D 500 million to the FONDEN special fund. More information in Spanish: (El Mundo, 09-02-2011; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/reservas-internacionales-cerraron-agosto-en-$29-06.aspx)

Is Hugo Chavez ahead of the investment curve?
Martin Hutchinson of Reuters says Venezuelan President Hugo Chavez may not be alone seeking alternatives as he plans to move billions of dollars of cash reserves from developed to developing countries, given the budget and bank woes afflicting the United States and the European Union. He adds that following the Chavez playbook is rarely a good idea, but in this case investors might be wise to take an asset transfer cue from him. (Reuters, 08-17-2011; http://blogs.reuters.com/columns/2011/08/17/is-hugo-chavez-ahead-of-the-investment-curve/)



Commodities

Grain export quotas: Dreyfus is still leading the ranking
In the first two days this week, the Interior Ministry of Commerce released wheat export permits bread (ROEs) for a total of 176,418 tons, of which LDC Argentina (Dreyfus), CARGILL and NIDERA Argentina received 50,000 tons each.
This August, the local affiliate of Dreyfus was one of the most favored in the granting of export quotas for wheat. In the first week it had received 69,465 tons from 74,952 tones distributed between 1 and 5 August, while last week (23 to 26 August) was 167 113 tons of the 248,157 released. More in Spanish: (Info Campo, 08-31-2011; http://infocampo.com.ar/nota/campo/27166/cupos-de-exportacion-de-cereales-dreyfus-sigue-liderando-el-ranking-)

Oil workers at joint ventures in the Orinoco Oil Belt held several meetings outside PDVSA’s facilities as they coordinate demands that the state oil company comply with different labor commitments. (Veneconomy, 09-01-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=27406&idc=4)



Politics

President Chavez to finish third chemo cycle this Friday
Venezuela’s President Hugo Chavez said that he would finish his third cycle of chemotherapy treatment this Friday.
He said: “We’re doing well. We’re finishing, with tomorrow’s journey (Friday), the third cycle of postoperative chemotherapy treatment”, and added that his medical treatment will be continued at the Carlos Arvelo Military Hospital, in Caracas. (AVN, 09-02-2011; http://www.avn.info.ve/node/75380)

Venezuela contrasts with the rest of the region for its support to Gaddafi
The Venezuelan government has tried to support to the regime of Libyan strongman Muammar Gaddafi at two Latin American summits. On both occasions, it has failed. Carlos Romero, an expert in international relations, thinks that the support of the Venezuelan government for the Libyan leader "is aimed at the world opinion." In other words, "it seeks to draw attention and disturb the international community which in its majority has closed ranks against Gaddafi." (El Universal, 08-31-2011; http://www.eluniversal.com/2011/08/31/venezuela-contrasts-with-the-rest-of-the-region-for-its-support-to-gaddafi.shtml)

Protests in Caracas up 124%
According to the half-yearly report prepared by non-governmental organizations (NGOs) Espacio Público (Public Space) and human rights watchdog Venezuelan Program of Education-Action in Human Rights (PROVEA), public protests in the Capital District during the first half of 2011 more than doubled total demonstrations in the first half of 2010. 348 demonstrations were held in the first half of the year in Libertador (Central Caracas) municipality alone, a 124% increase compared to 155 in the first half of 2010. (El Universal, 08-31-2011; http://www.eluniversal.com/2011/08/31/protests-in-caracas-up-124.shtml)

Chavez urges recovery of idle land to increase food production
President Chavez said Wednesday that the Bolivarian government must recover all vacant land in the country to go into production and service of the Venezuelan people. In view of famines currently underway in several countries, he invited producers to partner with the government, under the guise of joint ventures. More in Spanish: (AVN, 09-01-2011; http://www.avn.info.ve/node/75142)

Reuters: Opposition faces primary test
According to an analysis of opposition candidates that will participate in the primaries scheduled for 12 February 2012 published by the Reuters news agency, the Venezuelan opposition will have it’s best chance to defeat President Chávez in next year's presidential elections, but they must first group around a single candidate. More information in Spanish: (Ultimas Noticias, 09-02-2011; http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/reuters--oposicion-enfrentara-prueba-en-primarias.aspx)




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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