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 21, 2012

September 21th, 2012

Economics & Finance

Reserves fall to five-year low before vote
Venezuela’s international reserves fell to near their lowest level in five years as the government boosts spending ahead of next month’s presidential election.  The central bank said reserves fell U$D 300 million between Sept. 13 and Sept. 14 to U$D 25.2 billion, nearing the lowest since July 30, 2007, according to figures released today by the central bank. Reserves dipped to U$D 25 billion on May 31, and were below U$D 25.2 billion two days in June. (Bloomberg, 09-20-2012;; El Universal;

2012 budget exceeds its U$D 93 billion cap
Venezuela's 2012 budget initially was set at U$D 69.2 billion, yet new liabilities and government demands have forced the government to approve additional funding, increasing the budget by 36% (to U$D 94.4 billion). Since January, the National Assembly has approved AN additional U$D 25.1 billion, and last Tuesday it authorized yet another U$D 1.9 billion. (El Universal, 09-20-2012;

Elections ignite investor enthusiasm
Interest has risen in Venezuelan sovereign debt bonds as Presidential elections draw closer and several polls show opposition candidate Henrique Capriles gaining. Capriles has pledged to correct fiscal imbalances and carry out reforms. Brian Coulton, an investment strategy official at Legal & General Investment Management in London says "Venezuela is being watched very closely. Investors have become enthusiastic with signs that the opposition is gaining ground". More in Spanish: (El Nacional, 09-21-2012;

CADIVI allocates less FOREX to business
A study by the Venezuelan American Chamber of Commerce shows that currency allocated to major firms has slowed down over the past weeks, particularly in food, personal care, home products and the automotive industry. VENAMCHAM General Manager Carlos Tejera reports that 68% of firms in consumer products from all sectors report fewer approvals by the currency board. More in Spanish: (El Nacional, 09-21-2012;

Cheap credit fails to drive industry
The government is forcing the banking system to grant low interest credits to industry, agriculture, tourism and small business, but according to a study by ECOANALITICA results are beneath expectations. More in Spanish: (El Universal, 09-21-2012;

Government claims unemployment down from 8.3% to 7.9% since last year, in a report by the National Statistics Institute. More in Spanish: (AVN, 09-21-2012;ó-83-79-entre-agosto-2011-2012; El Universal,

Debt repayment will impact public finances
In 2013, Venezuela must to pay U$D 9 billion in foreign currency bond maturities, according to Angel García Banchs, President of the ECONOMETRICA consulting firm. Although international market conditions may allow Venezuela to issue new bonds in order to pay maturities, García says that when the US monetary policy changes, maturities will be increasingly difficult for the next five years. (El Universal, 09-20-2012;


Government sees refinery fire out soon
A fire caused by lightning at Venezuela's 146,000-barrel-per-day El Palito refinery ignited two naphtha storage tanks.
The incident revived painful memories of last month's disaster at the 645,000-bpd Amuay plant, the country's biggest oil refinery, when a gas leak caused an explosion that killed 42 people, injured dozens and damaged 1,600 homes. Asdrúbal Chavez, Vice-President of Refining, Trade and Supply of state oil company PDVSA (and a cousin of President Chavez), says the fire, is currently affecting one naphtha storage tank only, adding that the situation is "completely under control." He also said other refinery facilities are operating normally. President Chavez says the fire will be extinguished shortly and ruled out sabotage. (Reuters, 09-20-2012;; El Universal, 09-20-2012;; Bloomberg,; The Washington Post,; El Universal, 09-20-2012;; and more in Spanish: El Universal, 09-21-2012;

Venezuela and China agree to increase cement production
The Government and the Catic Beijing Chinese firm have signed an agreement to increase production at the Cementos Andino plant in Trujillo state, from 750,000 to 1.2 million tons per year. The plant is expected to double production over 16 months after a U$D 239.76 million investment. More in Spanish: (AVN, 09-21-2012;ón-cementos-andino; El Universal,

International Trade

Colombian trade with Venezuela is expected to reach U$D 3 billion this year, according to Colombian Trade, Industry and Tourism Minister Sergio Díaz Granados, who foresees  20% growth over 2011. More in Spanish: (El Mundo, 09-21-2012;$.aspx)

Logistics & Transport

Nine cargo food ships waiting at anchor in bay
There are 25 ships waiting at anchor in areas A and B of the bay of Puerto Cabello for entry into the local docks. The number increased since last Monday. Nine freighters: Day Dream Believer, Bassic Ocean, Marataha Promise, Emely Balket, Ijsselborg, Basic Brave, Pamir, Tampa and Tao UBC Brave are bearing food in bulk loads as yellow corn, paddy rice, malt and sugar. More in Spanish: (El Carabobeño, 09-20-2012;


Henrique Capriles met with Colombian President Juan Manuel Santos
Colombian President Juan Manuel Santos met with Presidential candidate Henrique Capriles Radonski, in his office at the Bogotá Presidential Palace. At the meeting, President Santos reaffirmed Colombia's neutrality toward the Venezuelan elections, hoped for a massive and peaceful participation of the Venezuelan people, and addressed the need to continue harmonious efforts to foster Colombia-Venezuela relations. (El Universal, 09-20-2012;

Chavez cites telephone tracking poll showing him 14.7% points above Capriles
According to the alleged DATANALISIS telephone tracking poll, President Chavez now has a 43.8% vote intention, against 29.1% for Capriles. The report is said to show that on the basis of 1200 telephone calls to people somewhat certain and very sure they will vote, 8.8% did not answer and 14.4% said they "didn´t know", which amounts to 23.2% potential swing votes. The President reported these results on national television but did not clarify how he obtained them. More in Spanish: (El Universal, 09-21-2012;

Cardinal Urosa calls on Venezuelans to vote "bravely" on October 7th, and
Caracas Archbishop Jorge Cardinal Urosa also called voting a "serious moral obligation", and called on Venezuelans to vote massively on October 7th, "according to their own conscience".  He added: "Only God will know for whom we vote. Reject improper threats."  More in Spanish: (El Universal, 09-21-2012;

Cancer? What cancer? Chavez's health off radar as vote nears
Just months ago, it was the issue dominating Venezuela and its presidential campaign. Now Hugo Chavez's bout with cancer is barely mentioned as his Oct. 7 re-election bid approaches. Once-frenetic rumors about Chavez's health have cooled to almost nothing while voters prepare to decide who will lead Venezuela - and control its vast oil reserves - for the next six years. Chavez, a socialist firebrand known for lambasting the U.S. "empire," faces market-friendly challenger Henrique Capriles, a 40-year-old lawyer and state governor who has vowed to end the seizure of private businesses and create jobs by attracting private investment. (Reuters, 09-19-2012;

Some 40 Latin American and international organizations on Human Rights said Wednesday Venezuela’s departure from the Inter American Court will have “serious repercussions” for Venezuelans. They asked the Venezuelan State to reconsider its decision and called on the OAS member countries to “urge Venezuela not to deprive its citizens from access to the highest court of the regional system of human rights protection.” (Veneconomy, 09-19-2012;

No comments:

Post a Comment