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.

Wednesday, April 18, 2012

April 17, 2012

Economics & Finance

Banks increase purchases of Government bonds
The Venezuelan basket of crude oil and products stands at U$D 112 per barrel year to date, but the increase in spending is so high that the Chavez regime is quickly increasing debts with local banks. The Ministry of Finance sells bonds each week to local banks and - according to official data - the government bonds portfolio held by private and state-run banks has increased by 20% in the first two months of the year, amounting to VEB 100.19 billion (U$D 23.46 billion). Debt creation will accelerate over the coming weeks as the government sells more bonds to Venezuelan banks in order to fund the agricultural sector. (El Universal, 04-16-2012;

CADIVI has authorized 1,000 million dollars for the food industry
The Currency Board (CADIVI) has approved U$D $ 1.202 billion for food imports during the first three months of the year, an increase of 16.6% over U$D 1.030 billion approved for the same period in 2011. Among the key food items purchased abroad are: yellow corn, cake and other soybean oil residues, milk powder, soybean oil, raw, unroasted malt, hatching eggs, animal and vegetable fats and oils. More in Spanish: (RNV; 04-16-2012;

Venezuela's stock-market registers world's largest growth
Venezuela's Stock Index is well above European stock-markets and showed the world's highest growth in 2012 with a 77.79% increase in equities, according to information published in the Spanish newspaper El Pais. Venezuela doubles Vietnam, which is second in the list. So far this year the index has grown 33.44%, followed by Egypt with 30.72%. An economic surge appeared by the end of 2011, when the Gross Domestic Product (GDP) went up 4.2%. Financial institutions and insurance grew 18.8%; construction, 12.8%; communications, 6.9%; trade, 5.7%; and manufacture, 3.3%. (AVN, 04-16-2012;


VENALUM operating at 28,2% capacity
Shrinking operations at the CVG VENALUM aluminum plant have taken a turn for the worse, as the industry started this week operating at 28,2% of capacity. On balance, updated yesterday, is has 26 connected cells and 649 that are out of service. 114 cells were shut down during the second week in April. More in Spanish: (El Universal;

Grupo Zuliano to buy Koch stake in Venezuela propylene plant
Grupo Zuliano CA will buy a 35% stake in a Venezuelan propylene plant from Koch Industries Inc., says Armando Sandoval, general manager of the Maracaibo-based company. The transaction, valued at about U$D35 million, will be completed by April 30. Grupo Zuliano, a Maracaibo-based holding company whose subsidiaries produce chemicals and plastics, previously had a 15% stake in Propileno de Falcon CA, known as PROFALCA, and will now hold 50%. A unit of state-run chemicals company PEQUIVEN SA holds the remaining amount. The acquisition was approved in a shareholders meeting yesterday, Sandoval said. (Bloomberg, 04-13-2012;

Venezuela oil falls to $113.85
Venezuela's weekly oil basket fell U$D 1.16 to U$D 113.85 as oil prices slipped in international markets on concerns over moderating world growth and European debt problems. According to figures released by the Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petróleos de Venezuela S.A. (PDVSA) during the week ending April 13 fell to U$D 113.85, down from the previous week's U$D 115.01. (Latin American Herald Tribune, 04-13-2012;

PETROPAR prepares U$D 264 million debt payment
Sergio Escobar, president of Paraguayan state-run oil company Petropar, says he plans to travel to Venezuela this week to settle the payment of a U$D 264 million debt with state-run oil company Petróleos de Venezuela (PDVSA).
The top official added that there is an agreement to pay the debt. (El Universal, 04-16-2012;

Venezuela does little to develop its mining potential
Venezuela has the largest gold reserves sin Latin America, about 65% of the region's total, but is the country with least invests in them. The same situation arises with regard to proven iron ore reserves held by the Guayana Development Corporation and developed by Ferrominera del Orinoco, are estimated at 1.7 billion tons, and calculated probable and possible deposits add up to 13 billion tons, which make it the tenth nation in the world in iron ore reserves. More in Spanish: (El Mundo,

International Trade

Colombia and Venezuela ratified pending addenda to bilateral trade agreement, signed by the presidents of both nations in 2011. They include preferential tariff treatment, sanitary and phitosanitary regulations, and rules of origin, among others. (Veneconomy, 04-16-2012; AVN, 04-16-2012;


Chavez skips summit citing medical reasons, heads to Cuba for cancer treatment
President Hugo Chavez skipped the Summit of the Americas for medical reasons and headed to Cuba to continue with cancer treatment that is increasingly forcing him out of the international spotlight. Foreign Minister Nicolas Maduro announced the decision from Colombia, where he was attending the summit in Chavez’s place. He told state television that Chavez decided not to attend on the advice of his doctors. (Washington Post, 04-14-2012;; El Universal, 04-16-2012;

Evo Morales fears for Chavez health
Bolivian President Evo Morales says he fears for the life of his counterpart Hugo Chávez. In an interview with Bogotá's El Tiempo daily he said: "I have a lot of fear...It hurts that a commander has health problems", and added that the Venezuelan leader is "always an optimist" More in Spanish: (El Universal;

Farmers report guerrilla presence in Zulia
Farmers and peasants in the Machiques region of Zulia are reporting the presence of guerrilla groups in farms located at the foot of the mountains. They say that for the last week over 100 men armed with weapons and sophisticated warfare equipment have been visiting properties and requesting cooperation for their movement. More in Spanish: (El Nacional;

Trends in drugs trafficking in Venezuela: a "concern"
Adam Szubin, Director of US Treasury's Office of Foreign Asset Control (OFAC), the agency responsible for assistance in anti-terrorist efforts, says trends in Venezuela are "a concern". He made his statement in an interview with Caracas daily "El Universal". In 2008, the agency for the first time added senior Venezuelan government officials to its OFAC's black list of drug kingpins for alleged cooperation with the Colombian Revolutionary Armed Forces (FARC). (El Universal, 04-16-2012;

Chavez listed as the most garrulous president among those still in office, adding up over 1,500 hours of speeches during in his 13-year presidency, according to Spain's daily ABC newspaper. “Long speeches are typical of leaders who are not very fond of democracy and appeal to mobilize listeners with sensations instead of presenting arguments,” explained La Fábrica de Discursos director Fran Carrillo. (Veneconomy, 04-16-2012;

Election Board estimates 75-80% will vote in presidential elections
Socorro Hernandez, a director at the National Elections Board (CNE), estimates that between 75 and 80% of Venezuelans registered to vote will attend on October 7 for presidential elections. "High participation is expected," as it seen by registration processes. (AVN, 04-16-2012;; el Universal,

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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