Economics & Finance
There are no guarantees that the government's debt with the private sector will be honored. Signs from authorities over the repayment of pending FOREX debt for imports by the private sector are far from encouraging. Although several groups have presented accounts of pending debts to suppliers, as well as met the requisites demanded for renewing imports, the authorities still have not guaranteed they will respond. Last week, the Ministry for Industries suggested that chemical, plastics and automotive industries could be repaid with petroleum, bauxite, aluminum and bonds. They provided few details, but some companies have rejected the idea. More in Spanish. (El Universal, http://www.eluniversal.com/economia/140218/sector-privado-sin-garantia-sobre-el-pago-de-la-deuda)
DATANALISIS believes scarcities will worsen dramatically over the next few weeks. DATANALISIS research firm president Luis Vicente Leon says "the violent situation the nation is going through will have a high economic cost that will worsen an outlook that was already negative", "Convulsion is here to stay: Economic crisis, students, armed gangs, repression and arrogance: A Molotov cocktail". "We are in a critical scarcity situation that is merely the tip of an iceberg...the situation today is infinitely better than that which we will have in two or three weeks". Leon says the only solution is through dialogue and negotiation. "You don't dialogue, you don't solve". More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/luis-vicente-leon-estima-que-escasez-empeorara-en-.aspx#ixzz2tfbPdhFh)
SICAD rate now stands at VEB 11.70 per dollar after cutting back its announced amount for last week . The Central Bank of Venezuela (BCV) reports that the exchange rate set by the Complementary Currency Management System (SICAD) is now at VEB 11.70 per dollar. Last week, SICAD allocated U$D 222 million to 785 companies. Initially an offer of U$D 440 million had been announced, but the amount was cut back in this first auction held under the aegis of the National Foreign Trade Centre (CENCOEX), in coordination with the Central Bank of Venezuela and the Economy Vice President. SICAD is calling a new auction this week for another U$D 220 million, this time directed exclusively at textiles, footwear, appliances, electronics and computers. Economy Vice President Rafael Ramírez again says he could raise the weekly amount to U$D 440 million next week. More in Spanish: (AVN; http://www.avn.info.ve/contenido/tasa-sicad-se-ubica-bs-1170-d%C3%B3lar; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/cencoex-adjudico-solo-222-millones-tras-depuracion.aspx; AVNoticias; http://www.avn.info.ve/contenido/centro-nacional-comercio-exterior-convoca-subasta-sicad-220-millones-0; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/cencoex-retoma-oferta-de--220-millones-en-el-sicad.aspx; El Universal, http://www.eluniversal.com/economia/140218/convocan-a-sector-textil-electronica-y-computacion-a-subasta-sicad; El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/sicad-podria-elevar-monto-de-la-subasta-semanal.aspx#ixzz2tfcN1XJC)
Oil & Energy
US lawmakers call for embargoing Venezuela oil imports. U.S. Rep. Ileana Ros-Lehtinen (R-FL), Chairman of the U.S. House of Representatives Middle East and North Africa Subcommittee, asked Secretary of State John Kerry to reduce oil imports from Venezuela and to direct the Permanent U.S. Representative at the Organization of American State (OAS) to call for a special session to discuss the ongoing Venezuelan crisis. “With the ongoing conflict in Venezuela and countless human rights violations occurring, I have asked the Obama administration to reduce its oil imports from Venezuela to send a signal of support to those being oppressed by the Maduro regime," said Ros-Lehtinen. "I also urge responsible nations throughout the Western Hemisphere to hear the calls for democracy coming from the streets of Venezuela and abide by the principles instilled in the Inter-American Democratic Charter by convening a special session at the OAS to discuss the escalating conflict." “I am deeply concerned about the crackdown against demonstrators in Venezuela and am particularly shocked by the arrest of opposition leader Leopoldo Lopez," said Representative Eliot L. Engel, the ranking Democrat on the House Foreign Affairs Committee. "I join the Inter-American Commission on Human rights in calling upon the Venezuelan government to protect the human and civil rights of its people. I also call upon all OAS member states to demand that Caracas end its assault on democracy and comply strictly with the Inter American Charter on Human Rights,” concluded Engel. (Latin American Herald Tribune: http://www.laht.com/article.asp?ArticleId=1624794&CategoryId=10717)
Murky accounts at PDVSA. Recent statements by Rafael Ramirez are confirming earlier reports about murky accounts at PDVSA. Ramírez said: "We believe our country should know how much FOREX we have allocated and who we have given it to...we need to see how much FOREX we have and how we are going to use them. What was going on was that we would see how much we had but their use was unplanned, I don't mean it wasn't adequate planning, there was simply no planning". Over 96% of all FOREX received by Venezuela go to PDVSA and problem is not simply a lack of planning, at CADIVI - where some U$D 30 billion were lost to fly-by-night operators, plus the markups, bribes, all of which leads to PDVSA where there is no control or auditing of funds sent to FONDEN and social projects. Grotesque numbers carry over from one year to another: U$D 54.433 billion were handed over by PDVSA to FONDEN or social programs that no one knows much about. In addition, only 58% of our exports are collected or arrive in country due to PDVSA agreements and the fact that their debt stood at U$D 43.384 billion at year end 2013. More in Spanish: (El Universal, http://www.eluniversal.com/opinion/140217/cuentas-turbulentas-de-pdvsa)
PDVSA expects U$D 9 billion in "new" outside investment this year. Economy Vice President Rafael Ramírez says PDVSA expects to receive U$D 9 billion in direct investments to raise productivity. He said this is a real possibility as the economy will grow in 2014, and added that agreements have been reached with five of PDVSA's key private partners for a total U$D 9.975 billion. Ramírez made such remarks upon signing an agreement with Spain's REPSOL for U$D 1.2 billion to increase production at the PETROQUIRIQUIRE joint venture. He added that India's RELIANCE Industries has announced it will buy an 11% share which is being abandoned by Malaysia's PETRONAS in the PETROCARABOBO project. Additionally, he says Argentina's PLUSPETROL has shown interest in acquiring a 40% interest that US firm HARVEST is leaving in the PETRODELTA project. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/inversiones-por---9-000-millones-estima-levantar-p.aspx#ixzz2tfcvZBBr; Prensa Latina, http://www.prensa-latina.cu/index.php?option=com_content&task=view&idioma=1&id=2389601&Itemid=1)
Private imports have dropped 70% in one year. According to Cipriana Vargas, a member of the Customs Committee of FEDECÁMARAS Vargas, private imports have dropped 70% in one year. She says if CENCOEX does not allocated FOREX for debts due to supplies, and if SICAD does not provide the amounts it offers, there can be no private imports, and adds: "We do not know who is receiving 'preferential' dollars". Eduardo Quintana, VP of FEDECÁMARAS VARGAS says that due to the drop in exports ships designed to carry 2500 containers are currently carrying 240-550 containers and even less, and that as a consequence shipping lines are sharing space and costs in order to maintain freightage. More in Spanish: El Nacional; http://www.el-nacional.com/)
Port movement at Puerto Cabello:
- Over 2000 tons of mil have arrived at port from Cartagena for the National Corporation for Supplies and Agricultural Services (CASA) and NESTLÉ Venezuela. Suppliers are, among others FONTERRA, CENTROLAC and NESTLÉ Argentina.
- 574 tons of soy oil were sent by ALBALINISA to CASA, also incoming from Cartagena.
- NESTLÉ Argentina sent its Venezuelan affiliate 21 containers bearing over 546 tons of condensed milk.
- The Coffee Trading Corporation and EXCOCAGUA sent CAFÉ DE VENEZUELA 32 vans bearing over 900 tons sent by MINERVA and LORSANAL to ALIMENTACION BALANCEADA.
- 15,000 tons of soy of Canadian red wheat arrived, exported by TERRA World Trade to Molinos Carabobo.
- A vessel with over 20,000 tons of soy has been at bay for one week.
Logistics & Transport
Port Authority (BOLIPUERTOS) is now charging for services at SICAD parity. BOLIPUERTOS has adjusted the cost of all services they provide after dollar parity was adjusted in last week's SICAD auction, from 11.36 to 11.7 VEB/U$D. This means costs have risen 85.71% in just one week for surface rights, stocking and storage, among others. More in Spanish. (El Universal, http://www.eluniversal.com/economia/140218/bolipuertos-facturo-sus-servicios-a-la-nueva-tasa-del-sicad)
World pressure builds for dialogue in Venezuela, Maduro lashes back, attacks Colombia's Santos
MERCOSUR's Parliament, on a motion supported by Brazil, Argentina, Paraguay and Uruguay, expressed regret over violence in Venezuela and called for dialogue. It said it may send a group from their Democracy Observatory to assist in the process. Colombia, China and Mexico also called for dialogue. UNASUR - the union of South American nations - made a similar statement, which Venezuela's Foreign Minister Elías Jaua altered when reading it publicly, putting in different lines. Colombia´s President Juan Manuel Santos also complained about mistreatment of Colombian nationals in Venezuela. Maduro lashed back saying Santos "again made the mistake of siding with the fascists...he is not going to give me lessons in democracy". In reference to worldwide calls for dialogue, Maduro said: "If the World wants to see a dialogue, here we are. A dialogue is much more than a limited dialogue among elite leaders". More in Spanish: (El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/140218/parlasur-aprueba-enviar-mision-de-observacion; CARACOL, http://www.caracol.com.co/noticias/internacionales/maduro-critica-a-juan-manuel-santos-por-opinar-sobre-venezuela/20140218/nota/2087261.aspx; NTN24 @NTN24 http://goo.gl/fv4L9z)
Maduro expels three US consular officials, State Dept. retorts he tries "to distract from his own actions"
President Nicolas Maduro is expelling three US consular officials, accusing them of meeting students involved in anti-government protests. "It's a group of US functionaries who are in the universities. We've been watching them having meetings in the private universities for two months. They work in visas," the president said. "Venezuela doesn't take orders from anyone!" he added. Triggering the expulsion was the Obama administration's siding with opposition leader Leopoldo Lopez, who is being hunted by police as Maduro accuses him of leading a "fascist" plot to oust the socialist government. Anzoátegui Governor and government party leader Aristóbulo Istúriz went as far as to suggest the US might attempt to murder opposition leader Leopoldo López. US State Department spokeswoman Jen Psaki quickly termed the charges "unfounded and false", and retorted that Venezuela was trying "to distract from its own actions by blaming the United States," adding, "These efforts reflect a lack of seriousness on the part of the Venezuelan government to deal with the grave situation it faces" (Yahoo: http://news.yahoo.com/maduro-expels-3-us-officials-amid-protest-tensions-040339045.html; BBC; Latino Fox News: http://latino.foxnews.com/latino/politics/2014/02/18/venezuelan-opposition-leader-leopoldo-lopez-re-emerges-from-hiding-surrenders/; and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/140218/washington-califica-de-falsa-acusacion-del-presidente; and http://www.eluniversal.com/nacional-y-politica/140218/isturiz-cree-que-eeuu-podria-asesinar-a-lopez)
Opposition leader Leopoldo Lopez re-emerges from hiding, surrenders to authorities at demonstration
Opposition leader Leopoldo Lopez re-emerged from days of hiding to make an impassioned speech to thousands of supporters and then surrendered to police, a move that he said will open Venezuelans' eyes to the increasingly authoritarian bent of their government. Opposition politicians urged calm as Lopez was taken away and frustration rose as a heavily armed police picket blocked supporters from marching downtown as they had originally planned. In a speech today, President Nicolás Maduro said National Assembly President Diosdado Cabello had personally taken Lopez to a place of confinement, to "protect" him from murder attempts by the US and Miami exiles. Other government spokesman Calixto Ortega said Lopez was merely taken in as a witness to provide evidence at the Palace of Justice. (Latino Fox News: http://latino.foxnews.com/latino/politics/2014/02/18/venezuelan-opposition-leader-leopoldo-lopez-re-emerges-from-hiding-surrenders/; and more in Spanish: Reporte Confidencial; Globovision: http://globovision.com/articulo/leopoldo-lopez-pido-calma-y-organizacion-no-permitamos-infiltrados)
Security forces raid an opposition party HQ. Security forces raided the headquarters of a Venezuelan opposition party accused of fomenting recent violence, after last week issuing an arrest warrant for the party's leader Leopoldo López on charges of murder and terrorism. López is a hardline member of the country's opposition and has backed recent student protests. The offices of his Popular Will party were stormed by what appear to be security forces in a video. "Four guys, dressed entirely in black, violently broke down the doors. They weren't police; they weren't National Guard," said volunteer Lisett Esteves, 24. "They asked for leaders of the party. Intelligence agents then came in with a warrant to take away all of our equipment." (USA Today)
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.