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, June 21, 2013

June 21, 2013

Economics & Finance

Central Bank plans expanded dollar auctions
Venezuela will boost supplies of dollars to importers as it seeks to alleviate a shortage of goods that is fueling the fastest inflation in the region, central bank director Armando Leon said. “In the next two months, the supply of goods and services should normalize,” Leon said. Inflation will slow from May, when consumer prices climbed a record 6.1% in the month, he said. The U.S. currency will be offered through auctions that will begin early in the second half of the year, Leon said. Unlike an earlier system, which was abandoned after one sale in March, small and medium-sized companies as well as individuals will be allowed to enter bids, he said. (Bloomberg, 06-19-2013;

Obtaining US dollars can take up to 208 days in Venezuela
Despite official announcements and promises the FOREX market still faces a bleak outlook. Obstacles in the sale of US dollars have limited business performance. According to a survey conducted by the Venezuelan Confederation of Industries (CONINDUSTRIA) it can take up to 208 days to acquire US dollars. A poll of 400 industrialists shows some "13% said delays in CADIVI (the Foreign Exchange Administration Commission) in providing US dollars amounted to 61-120 days, 40% said it takes around 121-200 days, and 47% said delays were over 200 days." (El Universal, 06-20-2013;

Inventories down 23% in Q1 2013
Difficulties in acquiring FOREX have forced business to lower inventories during the first quarter this year, leading to a 23% reduction, according to ECOANALITICA, which says that this translates into a 20% scarcity level according to official data from the Central Bank. More in Spanish: (El Universal,; El Mundo,

BARCLAY's expects a U$D 6 billion bond issue by September
BARCLAY's Capital is projecting that a bond issue for U$D 6 billion will be tendered by September. Their report says: "Based on adjusted cash flow projections, we expect a new U$D 6 billion bond issue in September or the last quarter this year". It goes on to say that cash flows may become normal in 2014, on the basis of high oil prices and an increase in flows coming from China. More in Spanish: (El Mundo,

Chances for “a social crisis” increase as decisions on FOREX policy are deferred, warns DATANALISIS Director Luis Vicente León. He also says that the lack of timely action has diluted initial optimism over the appointment of Nelson Merentes and meetings between the government and the private sector. (Veneconomy, 06-20-2013;

Top tax collection official detained in alleged corruption case
A top official at Venezuela’s tax collection agency has been arrested on suspicion of corruption and cash worth hundreds of thousands of dollars was seized from an apartment, President Nicolas Maduro said Thursday. Maduro said in televised comments that the National Tax Administration official was detained Wednesday evening. (The Washington Post, 06-20-2013;; Fox News,


Energy minister claims power failures are down by 50% in Venezuela
Electric Power Minister Jesse Chacón says energy consumption has been brought down to "levels reported a year earlier." He announced that 600 megawatts (MW) have been added to the grid. The target is to add 1,000 MW in 100 days. The Minister claims power failures have been reduced by 50%. (El Universal, 06-19-2013;

RUSORO seeks accommodation with the Government
RUSORO Mining has invited the government to sit down to reach a negotiated agreement over their mining operations in Venezuela, and say they are willing to drop the suit they have brought at ICSID calling for a U$D 3.033 billion indemnity for damages. More in Spanish: (El Mundo,

Upset about the price of gasoline? Get some perspective here
Think gasoline is expensive? It’s all relative. The cost of filling up the 39-gallon tank of a Chevrolet Suburban in Turkey is U$D 389.22, while in the U.S. it’s U$D 137. In Venezuela, it’s just U$D 1.56. The price of gas is one of the most universal complaints -- whether it’s teeth gnashing at the water cooler or deadly protests on the streets. This week, we’ve launched new data visualization about the price of gas around the world that shows which countries are most justified in their laments. Hint to my fellow Americans: We’re not even close. (Bloomberg, 06-21-2013;

International Trade

Non-oil exports hit lowest level since 2009
Non-oil exports fell in March to their lowest level since early 2009 in another sign of the economic problems accruing for President Nicolas Maduro's fledgling government. For decades, successive governments have decried the OPEC nation's over-dependence on oil - but done little to put into practice the grandiose words about diversifying the economy. The latest official data shows non-oil exports fell to U$D145 million in March of this year, 37% lower than during the same month in 2012. The only time monthly exports have been lower since 1997 when statistics started being kept, was U$D 144 million in 2009. (Reuters, 06-20-2013;

Logistics & Transport

Discounted rates for importers apply only to port charges
Confusion set in within the maritime community four days after a resolution went into effect offering a 30% discount to all shippers arriving into Venezuelan ports. The mix up is because the announcement posted on the Bolivarian Port Authority's web page on the reduction of tariffs and rates does not make it clear that the change does not apply to payment for services. It is reported that "for the use of surface, grain carriers are paying U$D 6.30, with no discount. Many calculate costs based on the offer by the Port Authority, but when actual port operators are asked they verbally tell you it is a mistake." More in Spanish: (El Carabobeño, 06-21-2013;


Diosdado Cabello: Any move against Maduro will be considered a declaration of war
National Assembly Speaker Diosdado Cabello, who is also first vice-president of PSUV ruling party, says there is still a long way ahead for "Chavismo" under the leadership of President Nicolás Maduro, and threatened that "any move" against the president by dissenters "shall be considered a declaration of war."
"There is a long way ahead for "Chavismo". If the right wing attempts any move against Maduro, it will be a declaration of war; we will take over the streets and take any actions we deem necessary," says Cabello. He went on to say the ruling party has identified each person who did not vote for Maduro in the past election and told government supporters to go out and knock on their doors.
(El Universal, 06-20-2013;

Analysis: Rough honeymoon for Chavez's successor in Venezuela
Wearing sports gear in the national colors and sitting on a sofa in a modest family home, President Nicolas Maduro holds a microphone, chats with locals and expounds on the benefits of socialism. Variations of the scene - on a factory floor, playing soccer in the presidential palace or walking the plains with farmers - play daily on national TV as Hugo Chavez's successor makes "Gobierno en la Calle," or "Street Government," the chosen slogan of his rule. Almost constantly on the road since being elected in April, Maduro has launched a plethora of new schemes, from raising the minimum wage to sending soldiers into city slums to fight crime. (Reuters, 06-20-2013;

Opposition alliance hopes US-Venezuela ties benefit  Venezuelans
After a meeting with US Assistant Secretary for Western Hemisphere Affairs Roberta Jacobson, Ramón Guillermo Aveledo, Executive Secretary of the opposition Democratic Unity Conference said the coalition was pleased to see Venezuela-US relations going back to normal, calling it a positive step. At the same time he emphasized that this move does not mean Venezuela's internal affairs are also back to normal. He pointed to several issues the country is facing: human rights violations, economic crisis, shortage, lack of response to challenges at the Supreme Court over April 14 election, and the whole entire crisis. (El Universal, 06-20-2013;

Maduro claims European tour yielded excellent results for the country
President Nicolas Maduro says his tour of European nations has provided excellent results for the nation.
  • In Italy, Maduro called on Pope Francis I and visited with Italian President Georgio Napolitano. He promised Italians "Venezuelan energy" for the next 50 to 100 years, after reviewing joint ventures with Italy's ENI, which call for producing up to 240,000 barrels of oil, and investments over U$D 15 billion to produce another 340,000 barrels in Northern Anzoátegui state. He said they would work with Italian companies to produce food in Venezuela.
  • In France, he met with President François Hollande and proclaimed their determination to forge a “strategic alliance” between the two countries. Maduro described his meeting with Hollande as “very productive,’ and said that a follow-up on the results achieved by the two presidents on bilateral subjects is scheduled for July in Caracas.  Negotiations with RENAULT were also reported.
  • During a meeting with Portugal's Prime Minister Pedro Passos Coelho he signed 14 bilateral cooperation agreements on food, health, culture, tourism and solid waste collection. The pacts include consolidating a financial partnership with Banco Internacional do Funchal, SA and Banco Espirito Santo, for expansion of their services in Venezuela; as well as the Portuguese cooperation in building a new Caracas-La Guaira freeway connecting Maiquetía airport to the Cota Mil highway that borders the north of Caracas. Also, a deal was made to buy 100,000 tons of frozen food in order to meet shortages.
(Latin American Herald Tribune,; El Universal, 06-19-2013;; AVN, 06-20-2013;; and more in Spanish: El Universal;; Ultimas Noticias,; El Mundo,

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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