November 02nd, 2012

Economics & Finance

Chávez predicts Venezuela's economy to grow at over 5%

During a press conference at Miraflores Palace, President Hugo Chavez said that, according to data from the Central Bank, Venezuela will continue to grow at the same pace it has for the past two years. "The numbers are going to be very positive, everything indicates we will continue to grow at over 5%", he said; and added that October inflation is below last year's. More in Spanish: (AVN, 11-02-2012; http://www.avn.info.ve/contenido/chávez-economía-venezolana-mantendrá-ritmo-crecimiento-5)

Venezuela to pay for SIDETUR nationalization

The Venezuelan government hasn’t dismissed workers from the company known as SIDETUR after it took control of its facilities, according to authorities. SIDETUR is a unit of Caracas-based steel company Siderurgica Venezolana SIVENSA. “We’ll fight anyone who tries to sabotage the nationalization process in court,” he said. “We’re going to determine a fair price and pay it.” (Bloomberg, 10-31-2012; Venezuela to Pay for Sidetur Nationalization; Fox News; http://www.foxnews.com/world/2012/10/31/venezuelan-official-says-shareholders-will-be-paid-fair-price-for-expropriated/)

Law on Fair Prices and Costs impacts profitability of companies

Businessmen indicate that enforcement of the Law on Fair Prices and Costs has hit profitability at production plants.

In an opinion poll conducted by the Venezuelan-American Chamber of Commerce and Industry (VENAMCHAM) of 137 companies, as many as 39.42% stated that the enforcement of the aforementioned law affected "profitability" negatively; 37.3% said, "There have been no changes;" and 28.47% said they were "searching a new cost model." (El Universal, 10-31-2012; http://www.eluniversal.com/economia/121031/law-on-fair-prices-and-costs-impacts-profitability-of-companies)

PDVSA announces payment of interest to bond holders

State-run oil company PDVSA announced to all holders of PDVSA 2017 bonds 2017 that interest accrued on such bonds for the year second half will be paid next November 2, and indicated all bond holders should contact the banks or the financial institutions where the bonds were purchased to get information about the status of the bonds and payment procedures. (El Universal, 10-31-2012; http://www.eluniversal.com/economia/121031/pdvsa-announces-payment-of-interest-to-bond-holders)

Consumption recovers while stocks fall

After an upward trend this year, the NIELSEN international consulting firm forecasts consumption growth at 4% in Venezuela by 2013. Their representative Pedro Manosalva says that after a five-year contraction in the food domestic consumption and personal care products, sales have increased by 7% this year, partially "due to lowered prices." Recovery was reported in "over half of the categories" included in the sample and "only 12% are still declining." The analyst outlined that the recovery of the volumes fluctuated from 2.4-6% between August and September. (El Universal, 10-31-2012; http://www.eluniversal.com/economia/121031/consumption-recovers-whereas-stocks-fall)

Commodities

Sale of oil byproducts to the US drops 43%

Venezuela's sales of oil byproducts to the United States have substantially declined amid deterioration of refineries and additional commitments to ship crude oil to allied countries, such as China. Statistics disclosed by the US Department of Energy, Venezuelan oil byproducts sales to the US averaged 52,000 barrels per day (bpd) from January to August 2012, down 43.4% from 92,000 bpd in the same period in 2011. In August 2012, crude oil shipments to the US rose by 17%, from 806,000 bpd to 943,000 bpd. However, a 5.7% decline was recorded in January-August 2012 compared to the same period in 2011, from 909,000 bpd to 857,000 bpd. (El Universal, 11-01-2012; http://www.eluniversal.com/economia/121101/venezuelas-oil-byproducts-sales-to-the-us-drop-43)

Sale of PDVSA byproducts in the free market stops after blast in Amuay

State-run oil company Petróleos de Venezuela (PDVSA) has stopped selling oil byproducts in the free market after the blast occurred two months ago in Amuay refinery, located in northwestern Falcón state. Since then, the refinery has been operating at half its capacity (333,000 barrels per day -bpd- out of 665,000 bpd). "There are no sales in the free market right now. As for byproducts, the few shipments are being sent only to China," a commercial operator reported. (El Universal, 11-01-2012; http://www.eluniversal.com/economia/121031/pdvsa-sale-of-byproducts-in-the-free-market-stop-after-blast-in-amuay)

Blackout hits Northwest Venezuela

A large power outage on Wednesday affected two northwestern Venezuelan states, Electrical Energy Minister Hector Navarro said. The blackout, the cause of which is not yet known, “is a significant failure” that reduced by 1 gigawatt the supply of electricity on the interconnected national power grid and affected the states of Lara and Yaracuy, Navarro told state-run TV channel VTV. He also said that “it would be irresponsible” to speculate about the cause of the outage at this time. (Latin American Herald Tribune, 10-31-2012; http://www.laht.com/article.asp?ArticleId=623969&CategoryId=10717)

International Trade

Imports feed consumption in Venezuela

Figures presented by the Central Bank of Venezuela (BCV) show that food production declined by 6.71% in July, 2012, compared to the same month in 2011. Between January and July 2012, the food sector in Venezuela shrank by 8.6%. Nevertheless, food, beverages and tobacco retail sales in specialized shops grew by 45.51% in July this year, in comparison with the same month in 2011. (El Universal, 11-01-2012; http://www.eluniversal.com/economia/121101/imports-feed-consumption-in-venezuela)

Logistics & Transport

China could apply cargo restrictions

The Ministry of Transport of China is studying the possibility of implementing a system that restricts cargo to Chinese flag vessels in order to assist government owned shipping firms. Specialized media report that "the Chinese government is considering a cargo reservation for transporting strategic and energy commodities on national flag vessels, in an attempt to rescue State shipping companies." According to Max Lin Tingyao Lloyd's List correspondent in Hong Kong, sources with the Ministry of Transport of China confirmed the possibility of booking charges, inspired by "long-standing practice of other countries." "This system will allow us to prioritize Chinese flag vessels to transport strategic goods". More in Spanish: (La Nación, http://www.lanacion.com.ar/1479119-china-podria-aplicar-la-reserva-de-cargas)

Politics

Chavez confirmed he will attend MERCOSUR meeting in Brasilia on December 7th, and says the nation is moving rapidly to take full advantage of the regional bloc’s potential. He made the announcement after meeting in Caracas with Brazilian Foreign Minister Antonio Patriota. The meeting was attended by Vice President and Foreign Minister Nicolás Maduro and Brazilian Industries Minister Alessandro Teixeira. Chavez said they are working quickly toward having a full agreement on a common external tariff by the time of the December meeting. He also called on the Venezuelan private sector to bring potential exporters to the negotiating table, and said: "We are obligated and will support them wherever we can and should: credit, financing, technology to raise production, and improved conditions for exporting."  Patriota said the relationship with Venezuela is one of that has the most potential, and announced Brazilian President Dilma Rousseff will attend Chavez's re-inaugural ceremonies in January. More in Spanish: (Infolatam, 11-01-2012; AVN; http://www.avn.info.ve/contenido/canciller-brasil-relación-venezuela-es-una-que-tiene-mayor-potencial; El Universal; http://www.eluniversal.com/nacional-y-politica/121102/brasil-evaluara-areas-para-invertir-en-venezuela)

Gubernatorial races take off

After receiving 6.5 million votes in the past presidential election, raising the opposition share by 7%, Miranda State Governor Henrique Capriles is now running for reelection, facing off former Vice President Elías Jaua. The formal race for 23 Governorships has now formally begun; 16 states are currently run by pro-Government governors, and 7 are opposition representatives. The key contest - to be held on December 16th - will be in Miranda State, surrounding Caracas, which has been a key opposition stronghold over the past years. As the campaign kicks off the opposition is accusing the Elections Board of sponsoring serious irregularities, such as allowing pro-government candidates to switch voting places and enter their picture on the ballot long after the period for registration has closed. More in Spanish: (Infolatam, 11-02-2012)

Spain's judiciary investigates the ETA-FARC-Chávez connection

Spain's Magistrate Eloy Velasco will ask the Venezuelan government for reports prepared by an Army officer here on relations between the ETA Basque terrorist organization, Colombia's FARC guerrilla and the government of Hugo Chávez. For some time now there have been reports of complicity between Chavez and terrorism in all of its forms. Two captured ETA terrorists interrogated in 2008 reported they had travelled to Venezuela for weapons training; and one of ETA's leaders, Mikel Carrera said that this nation was "safer than France" for them. Arturo Cubillas Fontán, convicted in Spain as a go between by the Basque terrorists and the Venezuelan Government is Security Chief of the Chavez National Land Institute, which has confiscated over 40,000 Venezuelan farms. More in Spanish: (Infolatam, 11-01-201)