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, May 30, 2014

May 30, 2014

International Trade

Incoming cargo at Puerto Cabello
  • Over 11,800 tons of foodstuff (chicken, beef cattle and solid tuna in oil) for CASA
  • Freezers from Kingston
  • 5,000 tons of Central power equipment from China Machinery Engineering Corporation, Shanghai, China for Corporación Electrica Nacional (CORPOELEC)
Eleven (11) vessels remain at bay, 1 of containerized cargo, 1 of general cargo, 4 vessels of solid bulk (One with corn and one with soy), one ship carries self-propelled cargo and four ballast situations. More in Spanish:  (Notitarde;

BOLIPUERTOS increases service rates by 693 %
Venezuela's port authority (BOLIPUERTOS) advised shipping lines that "the exchange rate to be used in FOREX by individuals or owners of foreign-registry ships, for services, such as the right of arrival, wharfage, loading or unloading, vessel movements and right to deposit registration of foreign ships must be calculated at the exchange rate reference SICAD II ". This means an increase of 693 %, since the SICAD II exchange rate is around VEB 50/U$D and rates up through May 19 services were based on the exchange rate of VEB 6.30/U$D. More in Spanish: (El Universal;

Logistics & Transport

Venezuelan government signs deal with airlines, AVIANCA paid 4% of past due debt
The government has signed an agreement with international carriers to convert turnover generated by their services in the country into FOREX over a two year period. General Hebert García Plaza, Minister for Air and Aquatic Transport, Tourism Minister Andres Izarra and the president of the National Foreign Trade Center, Alejandro Fleming explained that the recently announced government's decision to consider the airline tickets in the country under the rate of Supplementary System for Foreign Currency Administration (SICAD 2) aims to achieve economic balance. The government agreed to release U$D 12 million to Colombian airline AVIANCA, which is 4% of its revenue trapped in Venezuela because of currency controls, the company said on Wednesday. AVIANCA has accumulated the equivalent of more than $300 million in ticket sales in Venezuela that it has been unable to convert into dollars (AVN,; El Universal,; Reuters,

Oil & Energy

PDVSA stands to lose U$3D billion in 2014 if it continues subsidizing gasoline, says economist Luis Oliveros. He adds out having the greatest world oil reserves should not be linked to having such a low price for fuel. (Veneconomy,

Phillips 66 Says court supports 2009 takeover from PDVSA
Phillips 66 says an international tribunal ruling supports its right to acquire a 50% stake in facilities at its Sweeny Refinery in Texas from Petroleos de Venezuela S.A. The International Chamber of Commerce’s Court of Arbitration last month upheld Phillips 66’s right to exercise a call option in 2009 and assume PDVSA’s interest in Merey Sweeny LP, Rich Johnson, a spokesman for the Houston-based refiner, said in an e-mail yesterday. The partnership owns a 70,000-barrel-per-day delayed coker and related facilities at the refinery. “Certain defaults by PDVSA with respect to supply of crude oil to the Sweeny refinery triggered the right to acquire PDVSA’s 50% ownership interest,” Johnson wrote. (Bloomberg,

CNPC eyes additional oil bloc in Venezuela
State owned CNPC, China's largest energy company, is holding talks with the Venezuelan government to acquire a large oil bloc, according tp Gong Bencai, the company's vice-president for the Americas. The specific bloc wasn't named.  (El Universal;; El Mundo,

New electricity rates plan will be announced in June, according to Electric Energy Minister Jesse Chacón. He explained they have studied the demand and average temperatures by regions to define “rational and efficient use” in each. (Veneconomy,

Economy & Finance

Inflation in Venezuela soars to highest level in 18 years
Statistics from the Central Bank of Venezuela (BCV) indicate that Venezuelans are undergoing the worst inflation in 18 years, although the Maduro regime continues to impose price and FOREX controls. During Q1 2014, inflation rose by 10.1%, the highest jump for the first quarter since 1996. April data does not reflect any change in this trend. A report from the Central Bank's technical department to the Board, not yet authorized for publication, shows April inflation rose by 5.7%. (El Universal,

Purchasing power and consumption hit by inflation
Research firm ECOANALITICA estimated prices are likely to jump 76% in 2014, and the average wage will suffer a 14% loss in purchasing power, the highest since the strike held by the oil industry in 2003. Additionally, it estimated the minimum wage will suffer a 10% setback. (El Universal,

Bogus imports were around U$D 69 billion over the past 10 years
Last week, the president of the National Assembly's Finance Committee said some U$D 20 billion went to shell companies during 2011-2013 since an investigation showed that the amount of FOREX allocated during such period does not match the goods imported. However, bogus imports have been a common practice since the implementation of FOREX controls. Economic research firm ECOANALÍTICA estimates that over-billing in non-oil imports was around U$D 69.5 billion in 2003-2012. (El Universal,


Regime accuses opposition leaders of 'coup' plot, opposition calls the charges a "farce"
Venezuelan officials on have accused opposition leader Maria Corina Machado and other members of the opposition of leading plots to topple President Nicolas Maduro in league with U.S. officials. The allegations are the latest in a torrent from the government, which says three months of protests this year were a veneer for a U.S.-backed conspiracy to unseat the successor to late socialist leader Hugo Chavez. Maduro's top officials lined up for a much-touted news conference, which all local broadcasters were required to carry live, to denounce Machado and other opposition figures for "assassination" and "coup" plots against the president. They also accused U.S. envoy to Colombia, Kevin Whitaker, of being involved and in touch with Machado. A spokeswoman for the U.S. Embassy in Colombia did not immediately respond to requests for comment. Machado, 46, who was instrumental in calling Venezuelans onto the streets for three months of demonstrations against Maduro this year, scoffed at the accusations as "infamy" and said "all I want from Mr. Maduro is for him to resign". Ramón Guillermo Aveledo, Secretary General of the Democratic Unity Conference (MUD) called the charges a "farce", and the US government labeled the accusations as "false and unfounded". Three generals and an army captain were imprisoned in March, also on charges of "coup" plots. This year to date Nicolás Maduro has made 13 charges about plots by opponents who allegedly want to murder him. (El Universal,; Veneconomy,; Fox News,; Reuters:; and more in Spanish: El Universal,;; CNN Español,; Tal Cual:

US House of Representatives unanimously approves Venezuela sanctions, White House answers: Not yet
The US House of Representatives has unanimously approved a bill to introduce sanctions against Venezuelan officials involved in human rights abuses. The legislation calls for a travel ban on some members of the Venezuelan government and for their assets in US banks to be frozen. The US Senate Foreign Relations Committee advanced a similar bill last week. The White House opposes sanctions against Maduro's government. It says such measures could undermine efforts to find a political solution to the crisis. US Assistant Secretary of State for Latin America Roberta Jacobson says it is not yet the right time to do so, called sanctions "a tool, not an end" and added that the law allows President Obama to impose sanctions at any time, without the need for Congressional action. (BBC; Bloomberg,; Fox News:; More in Spanish: CNN Español,; El Universal,; El Mundo,

Maduro seeks to avoid poor relations with the US
President Nicolás Maduro says alleged assassination plans against him came from a "crazy ultra right wing" and announced he seeks to improve relations with the US. He named Maximilian Sánchez Arveláez as "chargé d'affaires" in Washington and praised statements by Roberta Jacobson opposing immediate sanctions. He said Sánchez Arbeláez will try to open "ways for communications and respect with the Government and Congress of the United States". More in Spanish: (Ultimas Noticias,; El Universal,

Russia opposes sanctions on Venezuela
Russia opposes any foreign interference in the affairs of Venezuela, including the imposition of sanctions, Foreign Minister Sergei Lavrov said in Moscow at a joint press conference with his Venezuelan counterpart. "All problems should be solved on the constitutional basis, without external interference, as well as without sanctions or threats to impose them," Lavrov said following talks with Venezuela's Elias Jaua. Moscow supports Venezuelan President Nicolas Maduro's efforts, in collaboration with the Vatican and the Union of South American Nations, to establish a negotiating process between the government and "a constructive opposition," Russia's top diplomat said. Jaua compared the anti-government movement in his country to the events that led in February to the toppling of Ukrainian President Viktor Yanukovych. The foreign ministers of the two oil-rich countries said they had high hopes for the 10th meeting of the Russia-Venezuela High Level Commission, set to get under way Friday in Moscow. "I am sure that tomorrow after the work of this commission, new accords that promote our economic association will be announced," Lavrov said. (Fox News Latino:; 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.

Tuesday, May 27, 2014

May 27, 2014

Logistics & Transport

Venezuela reaches deals with six airlines to pay dollar debt, airfares to adjust
Venezuela reached deals with six airlines to pay dollar debt and may devalue the Bolivar for ticket purchasers as it works to normalize flights and prevent airlines from leaving the country. The country will pay Colombia’s AVIANCA for money accumulated by its AVIANCA and TACA airlines in 2012, Finance Minister Rodolfo Marco Torres said. An agreement has also been reached with AEROMEXICO, Curacao’s INSEL Air, Ecuador’s TAME and Aruba Airlines for debt accumulated in 2013, he said. Airlines had an equivalent of U$D 3.9 billion stuck in bolivars as of April, according to the International Air Transport Association. Sales in bolivars can’t be exchanged into dollars for repatriation because of a decade-long system of currency controls. The airline association said currency restrictions have prompted at least 11 carriers to cut capacity, sales or routes here in the past year. The government announced that airfares starting in July will be based on a weaker SICAD II rate of about 50 Bolivars per dollar compared with the official rate of 6.3, says Humberto Figuera, president of the Venezuelan Airlines Association. (Bloomberg,; El Universal,

Oil & Energy

ROSNEFT buying U$D 2 billion oil as Venezuela seeks funding
Petroleos de Venezuela, S.A. will receive a U$D 2 billion pre-payment for oil and fuel supplied to ROSNEFT as the nation seeks funds amid domestic shortages and the world’s fastest inflation. ROSNEFT, Russia’s largest oil producer will make the payment to Venezuela’s state oil producer PDVSA in exchange for more than 1.6 million tons of oil and 7.5 million tons of oil products during a five-year period, ROSNEFT said in a statement posted on its website. On March 7, Venezuela signed a memorandum of understanding with ROSNEFT for U$D 2 billion in financing for oil projects in Venezuela. (Bloomberg,;; Latin American Herald Tribune,

Venezuela loses challenge to judges in U$D 30 billion ConocoPhillips expropriation
The World Bank’s arbitration forum, the International Center for the Settlement of Investment Disputes (ICSID), has ruled against Venezuela’s request to disqualify two judges who ruled against it in a multi-billion dollar suit brought by oil giant ConocoPhillips against the nation over the expropriation of ConocoPhillips' investments there. In March, two of the three arbitrators on the panel rejected Venezuela’s request for a new hearing, after the panel had found in September that Venezuela had expropriated ConocoPhillips’ investments and failed to engage in “good faith” negotiations to compensate the company. ConocoPhillips originally brought the biggest case to date against Venezuela in December of 2007 seeking U$D 30 billion in compensation for its stakes in two Orinoco projects - Petrozuata and Hamaca - and two joint venture exploration agreements in the Gulf of Paria, all of which Venezuela expropriated in 2007. (Latin American Herald Tribune,


Mining output shrank in all areas according to official data
Mining has been contracting over the last eight years, according to figures published in the 2013 Annual Report of the Ministry of Petroleum and Mining. The data shows that output of major ferrous metal ores, non-ferrous and non-metallic minerals such as iron, bauxite, gold, coal, clay, sand, limestone, feldspar, and silica have receded. More in Spanish: (El Mundo,

Economy & Finance

Poverty and extreme poverty are growing in Venezuela
Poverty in Venezuela increased 6.1% last year and stood at 27.3%, according to the National Statistics Institute (INE). The percentage of Venezuelan households living in poverty increased from 21.2% to 27.3% at the end of 2012 until last year, reflecting 1.79 million more poor people. According to the INE, extreme poverty also increased from 7.1% in 2012 to 9.8% in 2013, which means some 733,000 more people in extreme poverty. More in Spanish: (Ultimas Noticias,;; El Mundo,

Central Bank report reveals 30% scarcity index for 20 basic food items
A Central Bank report on scarcity by the end of April indicates there is more than 30% scarcity for 20 basic foods such as all types of milk, sugar, ground coffee, cooking oil, baby food, pre-cooked corn flour and sausages. More in Spanish: (El Universal,

US dollar deficit forces government to increase debt
Over the last six months, state-owned oil holding PDVSA has issued debt bonds amounting to U$D 9.5 billion. All the signs are that during the rest of the year the government will continue to resort to indebtedness to mitigate the US dollar deficit that is eroding public accounts. Debt in US dollars is no longer at comfortable levels. It skyrocketed 105% from the 3Q 2008 to the 3Q 2013 to U$D 104 billion. Now, debt service is taking up a significant amount of the oil revenues –which are Venezuela's virtually only foreign exchange source. (El Universal,

Polar Foods owes suppliers U$D 197 million
Polar Foods dollar debt with suppliers continues to grow. As of April 20 outstanding payments were U$D 197 million, with 179 applications Foreign Exchange Settlement Authorization (ALD) - some of them up to 825 old - pending approval at CENCOEX. Polar is Venezuela's largest private company and its largest food supplier. More in Spanish: (El Universal,


Landslide win - and threats from Maduro - for the wives of dissenting imprisoned mayors
Rosa de Scarano won 33,910 votes (87.74% of the ballots cast). She won the San Diego municipality in central Carabobo state over pro-government candidate Alexis Abreu (4,473 votes, 11.57%). Meanwhile, Patricia Gutiérrez de Ceballos totaled 88,991 ballots (73.60%) and became the new mayor of San Cristóbal  in southwestern Táchira state over pro-government candidate Alejandro Méndez (30,887 ballots, 25.54%). Both their husbands were removed from office and sent to jail by the Supreme Court after the government accused them of encouraging violent protests against President Nicolás Maduro. Opposition leaders say the ample victory should lead the judiciary to nullify their decisions and free the incarcerated mayors. Maduro quickly warned the newly elected mayors that if they turn "crazy" and insist on using violence politically "authorities will again act and if it is necessary they will be removed by the judiciary". (El Universal,; Veneconomy,; Fox News,; and more in Spanish: Infolatam)

CNN team denied right to cover Venezuela local elections
A CNN team was denied credentials to cover recent local elections in Venezuela. A CNN en Español correspondent and producer appeared at the Ministry of Communications in Caracas, and an official told them their credentials were denied. When the crew asked for an explanation, the official said that "they didn't understand why CNN needed to send an anchor to cover local elections when there are two correspondents accredited in Venezuela." The CNN team, including reporter Fernando del Rincón, intended to travel to the state of Táchira, where the most violent protests erupted in February in the southwestern city of San Cristóbal. Del Rincón has been criticized by both President Nicolas Maduro and the president of the National Assembly; Diosdado Cabello after an investigative piece by CNN showed that Cabello lied about alleged weapons found at a retired general's home. The picture that he used as evidence of the weaponry was of a gun shop in Wisconsin. (CNN,

Mind your own business, Venezuela foreign minister tells Kerry
Venezuela's foreign minister has rebuked his U.S. counterpart, John Kerry, for criticizing the handling of street protests and reiterated accusations Washington wants to topple the socialist government. In the U.S. government's strongest comments since demonstrations began in February, Kerry said last week that Venezuela's government had shown "total failure" of good faith in now-suspended talks to stem the unrest. "This is not an issue that concerns Mr. John Kerry," Foreign Minister Elias Jaua told reporters after returning from the regional UNASUR bloc's meeting in Ecuador. (Reuters,

US law to sanction Maduro regime to be debated Wednesday
The Venezuela Human Rights and Democracy Protection Act come to the U.S. House of Representatives floor to be debated on Wednesday, May 28. “I’m pleased that my bill seeking to hold human rights abusers in the Maduro regime accountable will be debated on the House Floor next week," said U.S. Representative Ileana Ros-Lehtinen, who sponsored the bill and sits on the House Foreign Affairs Committee. The House Foreign Affairs Committee passed the bill out of committee on May 12. The bill would impose sanctions against Venezuela and authorize the appropriation of U$D 5 million in 2015 to promote civil society in Venezuela. (Latin American Herald Tribune,

Colombian front runner will invoke Democratic Charter on Venezuela
Colombian Presidential front runner Oscar Iván Zuluaga says that if elected he will - "of course" - invoke the Inter American Democratic Charter over the crisis in Venezuela. He also said Venezuela can clearly not be a guarantor for peace talks with the FARC guerrilla "because it is a dictatorship". More in Spanish: (El Universal,

First steps to resume talks?
Over 50 detained protestors were released last week. NGO Foro Penal Director Alfredo Romero who has defended most of the detained during the protests says he believes the Nuncio may have influenced the decision. According to the NGO, 119 protestors remain in jail. (Veneconomy,

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.

Friday, May 23, 2014

May 23, 2014

Oil & Energy

PDVSA will receive U$D 2 billion in 3 additional credit lines from service companies
Petroleos de Venezuela, S.A. (PDVSA) has received new credit lines for a total of U$D 2 billion from SCHLUMBERGER, WEATHERFORD and HALLIBURTON, bringing total outstanding loans to U$D 13 billion since 2012. PDVSA has signed loans for $11 billion with seven oil companies (CNPC, CHEVRON, ENI, GAZPROM, REPSOL, PERENCO and SUELOPETROL) to increase oil production. (Veneconomy,;
Ramírez says agreement with REPSOL and ENI has been reached
Rafael Ramírez, Economic Affairs Vice President and Oil Minister, says an agreement has been reached with Spain's REPSOL and Italy's ENI to exploit condensed oil in the Perla 3X well in Northeast Venezuela. More in Spanish: (El Mundo,

Venezuela plans first shale gas exploration project
Venezuela plans to begin its first shale gas exploration campaign in western Lake Maracaibo in a joint venture with Brazil's state-run PETROBRAS, according to Venezuela's energy minister. The PETROWAYU joint venture is to run the project. According to PDVSA, it has a 60% stake in the company, while PETROBRAS has 36% and U.S.-based Williams has the remaining 4%. The minister did not say when exploration would start, nor how much PDVSA and its partners would likely spend. (Reuters,; AVN,;


Gold miner HIGHBURY files new U$D 633 million suit against Venezuela
Gold and diamond miner HIGHBURY International has filed a new suit against Venezuela before the World Bank’s arbitration forum, the International Center for the Settlement of Investment Disputes (ICSID), seeking U$D 633 million for the loss of its mining concessions Alfa and Delta, near the Caroní River in the mineral rich area of the southeastern Venezuela state of Bolívar.  Venezuela now has 28 cases pending against it – the most of any nation in the world. Other companies with pending ICSID arbitrations against Venezuela include mining and smelting companies ANGLOAMERICAN, Gold Reserve Inc., RUSORO Mining Ltd., CRYSTALLEX International Corporation, and TENARIS SA; food industry companies GRUMA, POLAR, LONGREEF, VESTEY, and OWENS-ILLINOIS Inc.; and oil industry companies Tidewater Inc., Williams Cos. Inc., Koch Industries Inc., ConocoPhillips, and ExxonMobil. (Latin American Herald Tribune,

Economy & Finance

Government spending is 65% higher than 2013
Official data from the Finance Ministry shows the government has disbursed VEB 227.6 billion during the first 4 months of 2014, a 65% increase from the same period in 2013, despite promises that fiscal balance would be restored. Salary and pension increases, as well as greater government spending have caused the increase. More in Spanish: (El Universal,

Pro-government legislator says U$D 20 billion went to phantom companies in 2011-13
Ricardo Sanguino, a pro government legislator who is part of the Presidential Commission to verify FOREX Allocations says a report on irregularities within FOREX allocations from 2011 to 2013 will be presented by mid June. He said preliminary results show some U$D 20 billion went to phantom companies that did not import what they said they would. More in Spanish: (El Universal,; AVN;

Minimum wages up in the region, except for Venezuela
In a joint report, the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labor Organization (ILO) pointed out that the minimum wage in the region recorded a real growth of 2.2% in 2013, except for Venezuela. The report outlined that in Venezuela the minimum wage was undermined by growing inflation, which hit 56.2% in 2013. (El Universal,

Regime prepares road show in NY, London
The government is preparing a road show in New York and London in an attempt to better communication with investment funds holding Venezuelan bonds or likely to buy new securities in the short and medium term. It is hoping to build links with international financial markets at a time when the country faces a serious gap between foreign currency demand and supply. (El Universal,

The economy has worsened in the last 90 days says FEDECÁMARAS Chief Jorge Roig. He explains that despite talks on economic affairs, there is no economic recovery because the same obstacles persist: Price controls, inspections and bureaucracy, labor laws and the FOREX controls. (Veneconomy,


Mediators leave as standoff continues, US Congress seeks sanctions on human rights violators. A South American effort to end a standoff in talks between Venezuela's government and opposition appeared to have stalled, while legislation in the U.S. Congress to punish Venezuelan officials for human rights abuses took a step forward. The foreign ministers of Colombia, Brazil and Ecuador left Caracas after a two-day visit without persuading opponents of President Nicolas Maduro to return to talks aimed at easing the country's political crisis. In a statement, the diplomats urged both sides to reflect on the next steps and decide on the date for another meeting in the near future. Opposition leaders pulled out of month-old talks last week to protest mass arrests at anti-government protests. As a condition for returning to negotiations, they are demanding progress on their proposals, including an amnesty for jailed activists and a non-partisan commission to investigate the 42 deaths tied to anti-government protests that began in February. As a breakdown in the talks looks more likely, a bipartisan effort in Washington to impose targeted sanctions on Venezuela advanced in Congress. By a vote of 16-2, the Senate Foreign Relations Committee approved a bill that would direct the Obama administration to impose a visa ban and freeze the assets of Venezuelan officials who committed human rights abuses during the recent wave of unrest. A similar bill cleared a House committee earlier this month. (The New York Times,

Kerry warns of possible sanctions against Venezuela. Secretary of State John F. Kerry has warned that patience with Venezuela’s government is wearing thin, and raised the possibility of sanctions against the country if the process of political reconciliation does not move forward. “Our hope is that sanctions will not be necessary. Our hope is that we can move in the direction of reconciliation and a political path forward,” Kerry said during a news conference. But Congress is discussing the sanctions, Kerry said, and it is up to Maduro and others to “make the decisions that will make it unnecessary” for sanctions to be imposed. Kerry said that “regrettably there has just been a total failure by the government of Venezuela” to act in good faith. “What is important for the Venezuelan government now is to honor the dialogue process, and to restore the civil liberties of opposition leaders who have been unjustly imprisoned,” he said. Maduro this week described a vote by the Senate Foreign Relations Committee to impose a visa ban on and freeze assets of certain Venezuelan officials as “detestable.” (The Washington Post,; Reuters,; El Universal,; Bloomberg,; Fox News,;

Opposition believes splits within the government stall agreements
Ramón Guillermo Aveledo, Secretary General of the opposition Democratic Unity Conference (MUD) says talks are useful and necessary, but that as long as the government shows no positive action the talks will remain frozen. "There have been no new actions that allow us to change our position, as we would like, and we hope promises turn into facts". The government is reported to be analyzing the release of all detained students and setting up a "plural" Truth Commission, but that internal divisions are holding up decisions. More in Spanish: (El Universal,

Maduro claims: "Talks will continue, with or without the MUD"
President Nicolás Maduro says his regime will continue holding peace talks with or without representatives of the Democratic Unity Conference (MUD), and he will not be "blackmailed by anyone". He did not say whom he would continue talking to. More in Spanish: (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.

Tuesday, May 20, 2014

May 20, 2014

International Trade

Imports reported at Puerto Cabello:
  • 21,650 tons of sodium sulphate in 3 bundles, from Spain, for Procter & Gamble, Alimentos Polar and Comercializadora El Gauche.
  • 2,070 tons of chicken, in 56 containers, from Brazil for Corporación de Abastecimientos y Servicios Agrícolas (CASA). 
  • 1,234 of metalic structures, in 465 vans for the government Consorcio de Estructuras Metálicas Modernas.
  • 1,079 tons of beef from Brazil for CASA
  • 900 tons of margarine, from Brazil for CASA
  • 211 tons of cream milk from Jamaica, for Nestlé
Twelve (12) vessels remain at bay in Puerto Cabello pending dock assignation, 7 of them carrying bulk cargo. More in Spanish: (El Carabobeño;,-carne-y-margarina-arribaron-al-puerto-carabobeo)

Wheat cargo expected to arrive
Nicolás Constantino, President of the Wheat Millers Associations (ASOTRIGO) reports wheat supply for the bread industry will improve in the next few days. He said the government authorized new imports 2 weeks ago in order to restore inventories. More in Spanish: (El Mundo,

China has become Venezuela´s main supplier of vehicles, but imports dropping
During 2013, China sold Venezuela U$D 269 million in automotive products, around 36.5% of the total imports here. This was a 63.17% drop from 2012 when Venezuela bought a little over U$D 769 million from China. (Veneconomy,; El Universal,

Panama, Venezuela to restore consular ties after spat
Panama and Venezuela "have proceeded to the exchange of (diplomatic) notes" to restore consular relations, suspended since March 5 together with diplomatic and trade ties in the wake of a political dispute, says the Panamanian Foreign Ministry. The reopening of consular facilities in both countries "will take place in the next few days." No further details were given. After relations were broken off, Panama presented "notes of protest" before the World Trade Organization for what it considers discriminatory measures by Venezuela, which include the suspension of millions of dollars in debt owed by Venezuelan importers to Panamanian exporters in the Colon Free Trade Zone. (Fox News,

Logistics & Transport

LUFTHANSA, IBERIA and AIR FRANCE halt Caracas ticket sales
LUFTHANSA suspended ticket sales to Caracas joining airlines that have taken similar actions over Venezuela’s currency controls. IBERIA - which holds 24% market share in Venezuela-Europe air transportation - reports "there are restrictions on the sales of tickets to and from Venezuela" AIR FRANCE says "there is no availability until further notice". Panama’s COPA said last week it will cut routes to Venezuela, saying it’s owned U$D 488 million by the government. Airlines had an equivalent of U$D 3.9 billion stuck in bolivars as of April, according to the International Air Transport Association. Those sales in the local currency can’t be repatriated because of a decade-long system of controls. The group said currency restrictions have prompted at least 11 carriers to cut capacity, sales or routes to Venezuela in the past year. Local international ticket sales have dropped 41% during Q1 2014. Caracas is now the most expensive destination in Latin America from and to any European country (over €1,000) because of the distortions. Tickets are between 20 and 40% more expensive; even more so than flying to Brazil during the World Cup, a travel agent told AFP. In addition, the IATA informed air carriers have cut their offers 15% to 75%. (Bloomberg,; Veneconomy,; and more in Spanish:; El Mundo,

Oil & Energy

Maduro has announced the creation of PETROPALESTINE
During a meeting in Caracas with Palestinian President Mahmud Abbas, President Nicolás Maduro announced the creation of PETROPALESTINE, to "provide Venezuelan diesel to Palestine". More in Spanish: (AVN,; El Mundo,

Economy & Finance

Total pending government obligations to the private sector around U$D 41.8 billion
Government debt to the private sector for pending FOREX reimbursements and frozen dividend repatriation continues to rise. According to the ECOANALÍTICA think tank:
  • Pending import debt to the private sector rose to U$D 25.8 billion by the close of March, a 9.3% increase.
  • Approved - but not paid - dividend repatriations are up to U$D 4.2 billion.
  • Unpaid service debt to airlines, insurance companies and others are now above U$D 5.7 billion.
  • PDVSA's pending obligation to companies in mixed venture projects, which are up to U$D 6.1 billion.
  • This all adds up to U$D 41.8 billion.
Business leaders have told authorities this is their main problem and is linked directly to paralyze production as foreign suppliers refuse to provide goods and services to Venezuela. Government response has been ambiguous. Economic Affairs Vice President Rafael Ramírez set off alarms in January when he conditioned repayment, then the government appeared to correct its course and promised to pay off up to 30% of its debt in priority areas. That repayment has not taken place and is hurting inventories and productivity. The National Industry Federation (CONINDUSTRIA) reports industry is operating at 48.02% capacity, the lowest level since the 2003 general strike. ECOANALÍTICA Director Asdrúbal Oliveros points out that while the regime leaves obligations to the private sector unpaid, it is stockpiling fund deposits abroad, which were up to U$D 15.8 billion in March, up from U$D 9.3 billion in March 2013. More in Spanish: (El Universal,

Dropping support for Maduro halts economic adjustment
Foreign bank representatives meeting with economic authorities report the government is working at an adjustment plan which involves a unified currency, increased gasoline prices, adjusting controlled prices and consolidating FOREX funds in order to increase international reserves...but a 13.4% drop in President Maduro's popularity - down to 37% - with 8 out of 10 polled considering the nation's situation as negative - has put a damper on further economic adjustment plans. More in Spanish: (El Universal,

April inflation jumps to 5.7% percent
Venezuela's consumer prices rose 5.7% in April, jumping from 4.1% the month before as the nation struggles to control inflation. The Central Bank this year has routinely delayed the release of economic indicators as the government of President Nicolas Maduro faces growing criticism over slowing growth, spiraling prices and chronic product shortages.
Daily newspaper El Nacional reported said 12-month inflation at 61.5% in April and that the Central Bank's shortage index, a measure of the availability of staple products, was at least 30%. Inflation for a given month is supposed to be published within the first ten days of the following month. (Reuters,

Finance Committee Chairman admits corruption in CADIVI, hints at unified currency
Ricardo Sanguino, pro government Chairman of the National Assembly's Finance Committee, has said "there was indeed corruption in CADIVI" and admitted that the regime was "very permissive" in controlling FOREX allocations. He also says the long term tendency is to unify all exchange rates. More in Spanish: (Ultimas Noticias,


UNASUR struggles to get paralyzed talks started again
In a brief statement after meeting with 3 UNASUR Foreign Ministers and the Papal Nuncio, Ramón Guillermo Aveledo, Secretary General of the Democratic Unity Coalition, said mediators will continue meeting with authorities in order to get the talks going again. Opposition leaders presented the delegation with a document setting forth "all details" which led them to put a freeze on the talks until the regime made "gestures" and complied with agreements which they say were made during meetings. A key sticking point is the liberation of political prisoners, which the government PSUV party leadership discards as "impunity". President Nicolás Maduro called on the opposition to rejoin the talks and says his government will not abandon negotiations, but added that if talks did not continue the nation would continue on its course. At the same time, Foreign Minister Elías Jaua said that all those who abandon talks "want war". A full meeting of UNASUR Foreign Ministers is scheduled to take place this week in Ecuador's Galapagos islands to evaluate the critical situation. More in Spanish: (El Universal,;; El Nacional;; Ultimas Noticias,; AVN;;  Infolatam)

Venezuela to protest in UN over alleged US interference in domestic politics
Venezuela has announced it will file a formal complaint to the UN and other international institutions over US interference in the country’s internal affairs that has aggravated the political crisis in the country. "We will be making formal complaints at the United Nations, since [the United States] is violating the UN Charter,” said Venezuela’s Foreign Minister Elias Jaua. He added that Venezuela will also file complaints to regional institutions - namely the Organization of American States, the Latin American and Caribbean grouping CELAC and the South American bloc UNASUR - and added that Caracas has prepared a "comprehensive file" with evidence against the US president, Secretary of State and other US officials, who allegedly interfered in Venezuela’s affairs. (Ria-Novosti,

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.

Friday, May 16, 2014

May 16, 2014

International Trade

Incoming cargo at Puerto Cabello
  • Over 79 thousand tons of child infant formula from Nestlé Deutschland AG
  • 30,000 tons of Yellow corn from Desa Industries and Terra World Trade for Avícola La Guásima, Productos Balanceados and Agro Lucha
  • 6,000 tons of paddy rice from Guyana Rice Development for CASA
  • Over 5,998 tons of frozen beef and chicken for CASA
  • 5,077 tons of powdered milk from Argentina in 195 containers, for CASA - as well as frozen chicken.
  • Over 3,000 tons of frozen beef and chicken from JBS y Minerva for CASA
  • Over 2,952 tons of frozen beef and chicken from Brasil JBS
  • 2,854 tons of automobile parts for Corporación Automotriz ZGT.
  • 2,403 tons of frozen beef to government corporation CASA. 
  • 1,647 tons of spaghetti in 63 van, for CASA
  • 1,568 tons of lentils and green peas from Canada, for CASA.
  • 767 tons of oil for industry supplies for Pdvsa Petróleo, Pdvsa Gas y Pequiven Morón.
  • 673 tons, 45 chassis units
  • 343 tons of truck tires in 27 containers, from Brazil, for GOODYEAR Venezuela.
  • Over 367 tons of blue cheese from Ecolat Uruguay for Productora de Lácteos Flor de Aragua
  • Over 361 tons of infant formula from Panalpina Transportes Internacionales for Venezuelan subsidiary
  • 156 tons of sanitary napkins and diapers, from Chile, for Procter & Gamble.
  • 113 tons of sanitary napkins from Procter & Gamble for Venezuelan subsidiary
  • 110 tons of infant formula from Nestlé México for Venezuelan subsidiary
  • Over 89 tons of infant formula soy from Nestlé USA for Venezuelan subsidiary
  • 403 tons of cured skins from Inter Logística for Italy Ferromo SPS
  • 126 tons of coaxial cable from Interamericana de Cables for CME Wire Coleman in United States

CENCOEX is paralyzed by a labor strike
Personnel at the National Foreign Trade Center (CENCOEX), which handles all FOREX import transactions, have gone on strike until their demands for higher wages are met. More in Spanish: (El Universal:

Logistics & Transport

Italy's Alitalia scraps Venezuela flights over currency dispute more may follow
Italian airline Alitalia has canceled service to Venezuela as of June 2 due to delays in repatriating revenue under the country's 11-year-old currency control system. Venezuela owes airlines some U$D 3.9 billion, according to the International Air Transport Association (IATA), because the airlines are required to sell tickets in the local bolivar currency but the government has not granted them approval to repatriate that revenue. IATA Regional Vice President for America Peter Cerda warns that more airlines may follow suit if authorities do not solve the debt situation. "Unfortunately there has been nothing formal on repayment with any airline", he said. (Reuters,; more in Spanish: Ultimas Noticias,

Oil & Energy

PDVSA to sell U$D 5 billion in 2024 bonds, company total debt is now up 11% to U$D 48.3 billion
State energy giant PDVSA, says it will raise U$D 5 billion through a private sale of 10-year bonds to the country's public banking sector. The bonds will carry a coupon of 6% and funds from the sale will go toward investment, including social development projects. It will not be registered with the U.S. Securities and Exchange Commission and will only be available to "qualified institutional investors" on the secondary market. Venezuela could use bonds to pay off part of its swelling debt load with private companies ranging from airlines to pharmaceuticals to car part importers. Russ Dallen, a partner at brokerage Caracas Capital Markets, said that in addition to debt repayment, he expects Venezuela to use part of the latest bond offer to feed a currency market called SICAD II, which was launched by the government in March to try and pump more greenbacks into the economy. “The government is in default with everyone except bondholders,” says Jorge Piedrahita, the chief executive officer at brokerage Torino Capital LLC. “We think this issuance will go very fast and won’t be enough to solve the dollar shortage, although the scarcity index will likely fall.” “The latest sale follows a U$D 4.5 billion issuance of 2026 PDVSA bonds in November, of which U$D 3 billion was destined to pay off accumulated debts with oil service providers while the remainder was sold to the central bank. The new bond increases PDVSA financial debt by 11%, bringing the total to U$D 48.3 billion. (Business Week:; Reuters,; El Universal,; Bloomberg,; Latin American Herald Tribune,; The Wall Street Journal:; and more in Spanish: (El Universal:

Venezuela reached an agreement with China to produce one million barrels per day with Chinese CNPC, according to Economic Vice President Rafael Ramírez, who is also Mining and Oil Minister, and President of PDVSA. He said the hopes to sign this agreement at the next high-level meeting. (Veneconomy,


Housing construction down 63% over the past 4 months, iron rod production down 62%
Lack of construction material - cement, iron rods, and others - is hurting the Government housing program. Reports from the Housing Ministry show that during the first four months of 2013 only 10,823 housing units were built - a 63% drop from the same period last year. Iron rod production is down 62% and cement sales at the end of February were down 11%. Electric and plumbing material is also scarce. Authorities had announced 400,000 new housing units to be constructed this year, but to date only 3% have been completed. More in Spanish: (El Universal:;

“Fair (higher) prices” for coffee, rice, sugar and chicken; higher milk prices considered
The Fair Prices Superintendent’s Office has published new prices for food staples, among them: ground coffee, coffee beans, white rice, sugar and chicken. Trade Minister Dante Rivas says that if necessary, the government will study the price of milk and consider increasing it. (Veneconomy,;

10 expropriated farms were returned to former owners
The National Cattle Federation (FEDENAGA) has announced that 10 farms expropriated in the past are being restored to their former owners in Barinas, Mérida, Zulia and Yaracuy states. More in Spanish: (Ultimas Noticias,; El Mundo,

Economy & Finance

Ecuador's Correa says Venezuela has made many economic mistakes
Ecuadorian President Rafael Correa, an ally of the Maduro regime, says "Many economic mistakes have been made (in Venezuela) and that it why there are economic problems which exacerbate political contradictions...Venezuela was the world's Saudi Arabia, and where did that money go?" More in Spanish: (El Mundo,; El Universal,


Opposition halts crisis talks due to increased repression by the government
Members of Venezuela's opposition say they may pull out of crisis negotiations with the government over what they consider an unjustified crackdown on recent protests. “We will return to meetings with the government if they show interest,” said Ramon Guillermo Aveledo, general secretary of the opposition alliance Democratic Unity Alliance, known as MUD. “The government is only increasing the repression. They have to decide whether they want to win war or peace.” Progress on issues ranging from a proposal to free jailed activists to the filling of positions on the national electoral council has been painstakingly slow, giving room to claims by students and hardliners that the talks are a ploy by President Nicolas Maduro to deflect international criticism. Papal Nuncio Aldo Giordano has expressed Vatican concern over the halt in talks to Aveledo; and Ramón José Medina, Deputy Secretary General of the MUD says the alliance to meet with UNASUR representatives and the Vatican representative this coming Sunday, and will ask them to name a secretary to follow up on progress in talks. They will also seek more meetings with the mediators as the only way to get results. Executive Vice President Jorge Arreaza and Caracas mayor Jorge Rodríguez, who heads the pro-government PSUV, met with National Assembly President Captain Diosdado Cabello, to analyze disruption of talks with the opposition. They are reported to be analyzing the MUD demand for a "plural" Truth Commission as a condition for resuming talks. (The Houston Chronicle,; Bloomberg,; and more in Spanish: (El Universal,;; El Nacional;

Government detains dozens of anti-government protesters in push to end demonstrations
Police in Venezuela have detained at least 80 demonstrators who were demanding the release of those arrested in recent anti-government protests. Hundreds of people, mostly students, had marched peacefully through the streets of the capital Caracas. But security forces later clashed with a group of demonstrators who threw stones and home-made explosives, and tried to erect barricades. The march was called by university students to demand the release of more than 200 people who were detained after security forces broke up protest camps last week. A student leader, Juan Requesens, vowed they would continue demonstrating despite the arrests. "The government is trying to suppress us by continuing to detain students. We will not bow down and will continue our protests," he said. Interior Minister Miguel Rodriguez, who has been the public face of the government crackdown on demonstrators, says the protest movement has dwindled to a hard core of a few hundred violent troublemakers and the unrest should be snuffed out by July. He says authorities are focused on about 100 radical opponents in Caracas and 100-200 elsewhere around the nation.  (BBC,; Reuters,

160 cases of torture filed, total may be 500
Alfredo Romero, head of NGO Foro Penal Venezolano (Venezuelan Criminal Forum) reports over 160 cases of torture, "included lascivious acts against minors," in the last three months. Romero noted that 160 complaints have been filed with the Attorney General's Office, but the NGO totals 500 cases. The NGO recorded 2,946 detentions, including 187 minors, on February 12–May 13. (El Universal,;;

Latin Security Index: Venezuela is the most dangerous country in the region
Venezuela has replaced Haiti as the most dangerous country in Latin America in this year's Security Index by the Latin Business Chronicle. The ranking offers a comprehensive view of the on-the-ground situation in these countries, and a comparative view of crime and security trends, giving individuals and companies the ability to assess potential costs and risks for travel or investment in the region. Venezuela tops the ranking this year, replacing Haiti as the most dangerous country in the region. The latest data from the United Nations shows that Venezuela now has the world's second-highest level of homicides per capita (with 53.7 per 100,000), and Caracas remains the world's most dangerous capital city - with almost 119 homicides per 100,000 people. (Latin Business Chronicle:

Jacobson says she got confused about Venezuela in US Senate
US Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson now says no member of the opposition coalition Unified Democratic Panel (MUD) taking part in negotiations with the government of Nicolás Maduro asked her to waive sanctions on Venezuelan officials accused of human rights violations. Jacobson told reporters she misspoke when she said last week -before a Senate panel- that Washington viewed as premature imposing sanctions on Venezuelan officials, because members of the opposition alliance had requested so. (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.