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, March 29, 2013

March 29, 2013

Economics & Finance

BARCLAYS: Undisclosed SICAD exchange rate indicates strong devaluation
Venezuela's Planning and Finance Ministry reports that the first FOREX auction through the Ancillary Foreign Currency Administration System (SICAD) was U$D 200 million allocated to 383 corporate bidders, at an unknown exchange rate, which has led BARCLAYS Capital to suggest there has been a strong devaluation of the local currency, for the second time in 47 days. Official reports have not revealed criteria for selecting beneficiaries, nor have they disclosed whether allocations went to public and private companies alike. (El Universal, 03-28-2013;;; Bloomberg,; Reuters,

Fitch Affirms Venezuela’s IDRs at ‘B+’
Fitch Ratings has affirmed Venezuela’s ratings as follows: Long-term foreign currency (FC) and local currency (LC) Issuer Default Ratings (IDRs) at ‘B+’; Short-term FC IDR at ‘B’; Country Ceiling at ‘B+’. The Rating Outlook is Negative. (Latin American Herald Tribune, 03-26-2013;; Reuters,

PDVSA cuts funding to welfare programs
Based on the 2012 report compiled by state-owned oil company PDVSA, the oil giant allocated fewer funds to welfare programs commonly known as missions. The Great Housing program was the only exception. According to the annual report, resources for social, agriculture and community programs fell by 22%, from U$D 15.3 billion in 2011 to U$D 11.9 billion in 2012. Resources to community programs were cut 71%, from U$D 585 million in 2011 to U$D 170 million in 2012. (El Universal, 03-28-2013;

Food manufacturers, distributors may see protests over shortages

Food manufacturers and distributors may see a wave of labor union protests in the coming days, and possible temporary closures ordered by the government, as shortages of staple foods become increasingly acute. Scarcity of basic foods has now climbed to its highest level since May 2008, according to Venezuela's central bank, which monthly calculates a scarcity index based on the availability of 17 different items in a range of shops. The Central Bolivariana Socialista de Trabajadores, CBST, which groups some 1,500 labor unions and which is politically affiliated to the government of interim President Nicolas Maduro, accuses supermarket chains of hoarding foods and speculating with prices; most economists attribute shortages to government-imposed price and exchange controls. Earlier this week members of the CBST demonstrated in various cities around the country, with the main protest target being Empresas POLAR, the country's largest privately-owned industrial conglomerate, although its operations in Caracas and Barquisimeto were not affected. The CBST plans to extend its protests to 12 of the country's 23 states. Another potential target in the foods sector is CARGILL. Although the protests are unlikely to immediately cause major disruptions to operations, they could prompt government institutions such as the tax collection agency, SENIAT, and the consumer protection agency, INDEPABIS, to carry out more spot inspections of businesses, leading to temporary closures and fines. In February INDEPABIS shut down at least five nationwide department stores chains. (LATIN-IG:

International Trade

Uruguay has requested to join the regional SUCRE currency, a move that will bring it into greater cooperation with the leftist ALBA, despite the fact it is not a member of the alliance yet. The regional currency system, the Unitary System of Regional Compensation (SUCRE) is used by Bolivia, Cuba, Ecuador, Nicaragua and Venezuela. (Veneconomy, 03-26-2013;


Political expert says Maduro is weakened
"The main challenge for Henrique Capriles Radonski is to make people realize that should they act as in the last presidential election of October 7, 2012. In the event of a turnout of seven million people for the opposition, winning the election of April 14 is plausible," according to Ángel Oropeza, a political expert and professor at Central University of Venezuela (UCV). He adds that pro-government voting has been be lower whenever deceased President Hugo Chávez was not running.  "History is against Chávezism; a part of the pro-government vote is tied to Chávez's figure," he says. (El Universal, 03-28-2013;

Election in Venezuela escalates with disqualifications on both sides
Everything counts in Venezuelan electioneering heading for the Presidential election on April 14, first to be held in the absence of deceased President Hugo Chávez, which is a face-off between acting President Nicolás Maduro and opposition leader Henrique Capriles Radonski. (El Universal, 03-28-2013;

US former official: Washington warned Chávez about assassination in 2002

In an article published on Americas Forum, Otto Reich, former Assistant Secretary of state for Western Hemisphere Affairs, stays the US alerted late Venezuelan President Hugo Chávez of an alleged plot back in 2002. Following accusations of acting President Nicolás Maduro, Reich denied Washington's involvement in the death of the Venezuelan leader, who died from cancer on March 5. "Despite the hostility that characterized the US relationship with Chávez, it is not only false to accuse the United States of killing Chávez, but the truth is that we likely prevented his assassination on more than one occasion," Reich remarked. (El Universal, 03-27-2013;

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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