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 22, 2011

November 22th, 2011

Economics & Finance

Public sector imports skyrocket 51%
Imports by the Venezuelan government January-September 2011 skyrocketed 51% to U$D 8 billion, thus showing the government’s increasing role as a provider. Data from the Central Bank of Venezuela (BCV) shows that imports by state-run entities climbed 51% in the first nine months this year compared to 2010. Last year, the Venezuelan government imported items amounting to U$D 5.3 billion; and in 2009 government imports were U$D 3.9 billion. (El Universal, 11-21-2011;

DATANALISIS reports increased food scarcity
The DATANALISIS polling firm says that during the week of November 15 scarcity of regulated foodstuff increased to 22%, the highest since March 2008. According to its estimation edible oil was missing in 43.7% of stores audited. More in Spanish: (El Universal, 11-22-2011;

Central Bank President says drop in food production is due to failures in beef and milk products
Central Bank President Nelson Merentes admitted problems in food processing during the 3Q 2011, which was 9.1% under results for the same period in 2010. He admitted problems in wheat, milk and beef production. More in Spanish: (El Universal, 11-22-2011;;  Tal Cual;

Price controls to start in five areas, communes in charge of enforcement
The new Superintendent of Costs and Prices, Karlin Granadillo, says inspectors will go to work this week on five key sectors: regulated foodstuff, personal care products, vehicle spare parts, medicines and health services. She said communes would be charged with supervising the application of price regulations in stores.

Businesses brace for more price controls
New rules aimed at curbing Venezuela's high inflation by broadening government price controls will scare off investors and hurt consumers, the president of the country's largest business chamber predicted Monday. Jorge Botti, president of FEDECAMARAS, said the Law for Fair Costs and Prices will spook investors looking for wider profit margins and cause shortages of basic goods because makers of numerous products will likely scale back production. "It's going to create more doubts and uncertainty," Botti said. The opening paragraphs of the new law state that unscrupulous businesses must be stopped from raising prices. It calls for government controls to limit the profits, giving that task to a panel of government authorities to be called the "Superintendence of Costs and Prices." (Boston Globe, 11-21-2011;

Economy grows due to public spending
Former BCV chief economist José Guerra says economic recovery is not yet as that recorded in 2008. He adds that economic activity is recovering thanks to larger outlays from the public sector. However, this growth has not come back to the levels of 2008, one of the booming years. President Hugo Chávez has announced that in the third quarter of 2011, the economy surged 3.5%. Two days later, he said it was 4%, based on the information supplied by the Central Bank of Venezuela (BCV). (El Universal, 11-19-2011;


Venezuela oil breaks U$D100 average for the year as weekly price hits 3 year record of U$D 111.24
Venezuela's weekly oil basket climbed to a 3 year high of U$D 111.24 as oil prices continued to grind higher in international markets amidst higher hopes for a resolution of the debt crisis rocking Europe and world markets.
According to figures released by the Venezuela Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending November 18 rose to U$D 111.24 from the previous week's U$D 109.40. (Latin American Herald Tribune, 11-18-2011;; El Universal, 11-18-2011;

Oil revenues rise 55% as oil production drops 0.3%
Local oil production does not mirror skyrocketing oil prices and higher oil revenues. The country's oil output declined 0.3% in the third quarter of the year, according to the by the Central Bank of Venezuela. Minister of Finance and Planning Jorge Giordani claims the sector's poor performance is due to the fact that the oil engine "is just starting (to warm up)." (El Universal, 11-18-2011;

Non-oil exports slow down
Almost two years after the government promised in January 2010 to strengthen non-oil exports, such exports remain low.  (El Universal, 11-21-2011;

International Trade

Government will finish paying a U$D 4 billion loan from China in February only to negotiate another renewal for the same amount, according to Planning and Finance Minister Jorge Giordani. With the new loan, China will have injected some U$D 32 billion to the local economy, which Venezuela repays with oil shipments. (Veneconomy, 11-18-2011;


Colombia's Santos highlights upcoming meeting with Venezuela's Chavez
During a visit to London, Colombian President Juan Manuel Santos has highlighted the significance of a meeting he will hold with his Venezuelan counterpart Hugo Chavez on November 28th. He said the meeting will reactivate a road map undertaken when the bilateral diplomatic and commercial relationship was resumed. “We delayed it due to the health condition of President Chavez, but it is very significant for Colombia and Venezuela to move on in that encounter," Santos said. (AVN, 11-20-2011;

Government wants to maintain a constructive relationship with Spain
The Government of Venezuela has expressed its wish to maintain a constructive bilateral relationship with the new Government in Spain, based on mutual respect, through a statement by the Foreign Ministry in which President Chavez congratulated the Spanish people for the democratic exercise during the general elections held last Sunday. (AVN, 11-21-2011;

..but does not foresee normal relations with the US
Foreign Minister Nicolas Maduro says there are no normal diplomatic relations in sight with the United States in the short term, due to “the impositions of the reactionary right” in Washington. He says that on instructions from President Chavez they have been willing to move on with respectful communications to normalize relations, but that there is no short term possibility of change. More in Spanish: (Tal Cual, 11-22-2011;; El Universal;

Diego Arria files crimes against humanity complaint against President Chavez at The Hague
Diego Arria, a former Venezuelan Ambassador to the United Nations and a pre-candidate to opposition presidential primary election has filed a complaint with the International Criminal Court (ICC) at The Hague, Netherlands accusing Hugo Chavez and some of his top aides of crimes against humanity. (El Universal, 11-21-2011;

Chavez says his 2013-2019 term will deepen socialism
In a recent speech, President Chavez announced that the upcoming 2013-2019 term of office will serve to “deepen” the socialist revolution. More in Spanish: (Agencia Venezolana de Noticias;ávez-adelanta-que-período-2013-2019-será-para-profundizar-socialismo)

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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