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, April 25, 2014

April 25, 2014

International Trade

Food, along with Army tanks have arrived at Puerto Cabello
  • 33.000 tons of corn for state company CASA
  • 20.000 tons of wheat from Canadá for Pasta Sindoni
  • 10.500 tons of degumming crude soybean oil for CASA
  • 10.000 tons of degumming crude soybean oil for Cargill de Venezuela
  • 900 tons of black beans, from Binograin for CASA
  • Russian state company ROSOBORONEXPORT, sent war tanks for Venezuelan Army
  • 3.000 tons of auto parts from Ica Internacional for Corporación Automotriz ZTG
  • 39.501 kg of Anhydrous sodium sulfate for Ecco Chemical Trading

Oil & Energy

PDVSA announces new oil finds
State-owned oil giant Petroleos de Venezuela SA (PDVSA) says it has made new oil finds in three different areas of the country. An "effective exploratory drilling plan" begun in late 2013 has resulted in the discovery of 185 million barrels of crude and 1.1 trillion cubic feet of gas. Venezuela has 297.5 billion barrels of proven oil reserves, more than any other country in the world. Most of that crude is located in the Orinoco Belt, a territory in eastern Venezuela that holds roughly a quarter of the world's petroleum. The three latest finds, all onshore, include 100 million barrels in an area straddling the northwestern states of Zulia and Falcon, 75 million barrels in the northeastern state of Anzoátegui and 10 million barrels in an area overlapping the western states of Barinas and Apure. (Fox News Latino,

Halliburton still seeking to work in Venezuela
Halliburton's Chief Financial Officer Mark A. McCollum says the company’s receivable position in Venezuela was little changed after an improvement in payments at the end of the fourth quarter. “That was driven probably more by an expansion of our operations in Venezuela versus a lack of payment -- it still is slower than what we would like it to be,” he said. “We take a long-term view on Venezuela. We continue to be constructive about that market and think it can work for us.” (Bloomberg,


Government, farmers associations review agricultural development
The National Association of Farmers and Stockbreeders (FEDEAGRO) has held its annual assembly with ranking government officials in attendance. Agriculture and Lands minister Yvan Gil highlighted that the government is willing to give financial and technical support to all producers. (AVN,

Food basket up 71.5% in one year

Venezuela's food basket price has jumped 71.5% in one year, according to the National Statistics Institute (INE).  In February, the food basket was calculated at U$D 592, up U$D 247 versus U$D 345 in February 2013.
The price variation in January-February was USD 2.49%, according to the institute. (El Universal,

Economy & Finance

Maduro offers business olive branch of funding
President Nicolas Maduro offered the private sector access to financing via state investment funds during a meeting with business leaders meant to stimulate the struggling economy and ease historic tension with industry. At a meeting called the Economic Peace Conference, Maduro said businesses will be able to seek loans from the behemoth state-run fund FONDEN, a joint Chinese-Venezuela fund, and a fund linked to trade bloc MERCOSUR. "I will put (the funds) at the service of this economic forum ... to spur a new strategy of investment," Maduro said in televised comments. "I call on you to join this battle for productivity, growth, fair prices and economic development." (Reuters,

...and flexible import controls for “food staples, first-need goods, medicines and personal hygiene products” will remain through December 31.  (Veneconomy,

Fair Prices Law may be improved
During the same meeting Maduro referred to the controversial Fair Prices Law, saying "I think that as time goes by, we may improve it." (AVN,

Government, auto industry sign agreement to set fair prices
National Superintendent of Fair Prices Andreina Tarazon says the government will sign an agreement with companies in the automotive and appliance industries to establish for fair prices. She added that these actions are part of a new methodology to clarify cost structures. (El Universal,

Economic crisis catches up with malls
Fifteen years of socialist rule and an acute economic crisis is catching up with Venezuela's shopping malls, once impenetrable oases of consumerism where rich and poor alike sought refuge from crime-ridden streets. While a decade of rigid price controls long ago forced Venezuelans to scavenge for basic goods like toilet paper and corn flour, an oil-fueled spending boom and hands-off approach to less-essential parts of the economy had always left stores catering to the well-off looking display their social status with designer brands. Things started to change with the election a year ago of President Nicolas Maduro and the onset of an economic crisis that has been the main driver of deadly protests shaking the country over the past three months. With the supply of dollars drying up as oil production wanes, imports have fallen and shortages have hit record levels. Meanwhile, galloping 57% inflation is eroding families' purchasing power. Maduro says the problems are a result of price gouging and hoarding by opposition-aligned merchants waging an "economic war" to destabilize his government. His response has sent shockwaves through the retail industry. In November, he seized a nationwide chain of appliance stores and slashed prices on fridges, plasma TVs and computers. The fire sale, which emptied the shelves, was followed by an even more devastating blow to business: a freeze on commercial rents at rates more than 50 percent lower than they had been at some malls. Incomes for shopping malls plummeted by as much as 75% as a result of the rent freeze, according to Claudia Itriago, director of the Venezuelan Chamber of Shopping Centers. Malls are now at risk of shutting down. To reduce costs, many are cutting back on frills such as holiday displays, and even essential services like cleaning and air conditioning.  At one of the capital's most chic shopping spots, dozens of stores are closed on any given day. Strict labor laws make it nearly impossible to fire workers. So to get around the juggernaut and reduce payroll costs, many stores don't bother to open every day. When they do, bored clerks fiddle with their cell phones and flip through magazines. This year, shopping centers have slashed security and maintenance personnel, something they can do because such work is outsourced. Merchants suffering the most are those selling clothes, toys and electronics — anything that's imported. (ABC News:

IMF calls for deep adjustments in Venezuela's economy
The International Monetary Fund (IMF) advised Latin America to engage in a more prudent fiscal policy with profound adjustments in Venezuela and Argentina, in order to avoid the turmoil resulting from cuts in the US monetary stimulus and lower China's demand for the region's exports. In its report, "Regional Economic Outlook, Western Hemisphere," disclosed in Peru, the IMF commented that Argentina and Venezuela were "facing a difficult growth outlook, linked to significant macroeconomic imbalances and distortionary policies." (El Universal,


IACHR: Insecurity threatens human rights in Venezuela
In 2012, the Venezuelan government conceded that 16,072 murders were committed in Venezuela, that is, 54 homicides per 100,000 inhabitants, which turns Venezuela into one of the most violent and dangerous countries around the globe. The figures concern the Inter-American Commission on Human Rights (IACHR), institution that says in its Annual Report 2013 that the rise in crime rates "affects Venezuelan citizens' enjoyment and exercise of their human rights". (El Universal,

Vargas Llosa: "Freedom in Venezuela has revived"
During a visit to Venezuela, Peruvian writer and winner of the 2010 Nobel Prize in Literature, Mario Vargas Llosa said on Thursday that "elections in Venezuela shows that people can be wrong and move backwards." Nevertheless, he also pointed out that people can rectify. "A snowball effect started in Táchira state," he said. He stressed "radical anachronism" in Venezuela; and added: "I don't think that socialism is alive and kicking". (El Universal,

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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