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.

Tuesday, May 6, 2014

May 06, 2014

International Trade

Incoming cargo at Puerto Cabello
  • Over 7.038 tons of chicken and beef from JBS S/A for the government's Corporación de Abastecimientos y Servicios Agrícolas (CASA)
  • 521 tons of frozen beef from Marfrig Alimentos S.A., Minerva S.A. y Baldony S.A. for Consorcio Comeimport, Inversiones 6308, Importaciones y Exportaciones Mounty and Makro
  • Over 200 tons of prefabricated buildings from Lenard Overseas for PDVSA Industrial

Venezuela and Vietnam review standing agreements
Vietnam's Foreign Affairs Vice Minister Ha Kim Ngoc is currently in Venezuela seeking to deepen strategic cooperation and review the status of major joint projects in the sectors is reviewed: energy, agriculture, aquaculture, electricity, industry and trade. More in Spanish: (AVN;; Ultimas Noticias,; El Mundo,; El Nacional,

Oil & Energy

The price of Venezuelan oil drops again
Venezuela's weekly oil basket stayed below the country's desired U$D 100 a barrel floor and fell as markets around the world seemed to be well-supplied. According to figures released by the Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending May 2 was U$D 96.50, down U$D 1.21 from the previous week's U$D 97.71. (Latin American Herald Tribune,

Ramírez says low gasoline prices are "burning away the future"
Government officials have for some time been considering adjusting domestic oil consumption prices and speak of public consultation on the matter. In a recent interview, Economic Affairs Vice President Rafael Ramírez said: "These prices make no sense...with these gasoline prices we are burning away the future." More in Spanish: (El Mundo,


Pharmaceuticals scarcity level at 50%
Based on data supplied by the Central Bank, by the end of March, shortages of pharmaceutical products rose to 50%. The report verifies the day-to-day plight of patients. (El Universal,

FORD halts operations in Venezuela due to lack of parts
FORD Motor Venezuela is stopping all activity in Venezuela as scarce inventories available have now been used up. It hopes to start operating again on May 30th but there is no assurance it will by then have received the needed vehicle components. It will continue to meet payroll commitments during the shutdown. More in Spanish: (Ultimas Noticias,; El Mundo,

Economy & Finance

CITI has released its April 2014 commentary on Venezuela (attached) with the following conclusions:
  • Venezuela is in a downward spiral, economically, socially and politically, with no end in sight
  • The economy is becoming more rather than less dependent on oil
  • The private sector is reducing investment, as much by necessity as choice, further
  • reducing the economy’s productive capacity
  • The exchange rate regime can best be described as ‘dysfunctional’, with rapid
  • inflation and a major shortage of foreign exchange likely to dictate further
  • significant changes over the next few years
  • The shortage of foreign exchange will lead foreign companies to reduce the scale
  • of operations in the country and to accept large balance sheet losses

Fitch downgrades Venezuela's CITGO outlook to negative
Fitch Ratings has affirmed the Issuer Default Ratings (IDR) for CITGO Petroleum Corporation (CITGO) at 'BB-' and the company's senior secured ratings (including the revolver, term loans, and fixed-rate industrial revenue bonds [IRBs]) at 'BB+'. The Rating Outlook has been revised to Negative from Positive. The recent downgrade of CITGO's ultimate parent PDVSA is the main reason for the revision in Outlook at CITGO. Approximately U$D 1.08 billion in balance sheet debt is affected by today's rating action. (Latin American Herald Tribune,

Bond market prices lower risk of Venezuela default
Recent credit default swap (CDS) spread movement for Petroleos de Venezuela (PDVSA) is copying Venezuela's and credit protection for the oil giant still being priced at stressed levels, according to Fitch Solutions in its latest CDS Case Study Snapshot. Five-year CDS on PDVSA have tightened 38% since mid-February and 19% over the past month, a trajectory similar to Venezuela. 'The CDS market is currently charging a 24% premium for credit protection on PDVSA's debt, as compared to the sovereign, up from 17%,' says Director Diana Allmendinger. (Latin American Herald Tribune,


Poll shows 79.5% think Venezuela is doing badly
Eight out of 10 Venezuelans believe the country's situation is negative, according to a nationwide poll conducted by research firm DATANÁLISIS. Based on a poll taken between March 31 to April 20, 79.5% believe the country's situation is bad, 18.5% said it is good, and 2% made no comments. Half of those identified as Government supporters described the situation as bad. The figure goes up among dissenters and those who do not take any sides: 96.9% and 89.6%, respectively. (El Universal,

"If Maduro wants to quit the talks, then he should just say so"
Just as a signature collection process for a proposed amnesty law was launched nationwide, Ramón Guillermo Aveledo, Secretary General of the Democratic Unity Conference (MUD) replied to a comment by President Nicolás Maduro accusing the opposition coalition of "blackmailing" the government by demanding concrete results from bilateral meetings started on April 10. "We‘ve been granted short-term credit by the people; that's what I refer to when I talk about showing results. That's no blackmail, it's a practical thing. In the presence of results, the promissory note will be extended by the holder, i.e. the people. Signs of credibility will be most needed along the long road ahead," Aveledo says. (El Universal,

Maduro bodyguard shot dead
29 year-old Lieutenant Marco Cortez, a member of President Maduro's bodyguard unit was shot dead from another running vehicle while he was driving on a Caracas freeway, with his wife - who was unharmed. He was pronounced dead on arrival at the Military Hospital. He also worked on the security detail for the late President Chavez. One week ago the bullet riddled body of former Director of Intelligence, Eliécer Otaiza, was found in a little travelled road near Caracas. Maduro claimed he was the victim of former politicians now living in Miami. More in Spanish: (Infolatam)

Regime says 58 foreigners among unrest detainees
Interior Minister General Miguel Rodriguez Torres told a news conference that 58 foreigners had been arrested on suspicion of inciting anti-government protests and violence that have rocked the nation for the last three months. He said Colombians, an American, a Spaniard and an Arab were among the scores of "mercenaries" rounded up before and during demonstrations against the socialist government. He showed reporters numerous flow-charts and photos of alleged meetings, phone calls and plotting. (Reuters,

US Senate to explore human rights abuses in Venezuela
The US House Committee on Foreign Affairs has scheduled a hearing for Thursday, May 8, on allegations of human right abuses taking place during the street protests that have taken a death toll of 41 in Venezuela. The session will be attended by Roberta S. Jacobson, the United States Assistant Secretary of State for Western Hemisphere Affairs; Moisés Naím, an expert with the Carnegie Endowment for International Peace; José Miguel Vivanco, the director of the division for the Americas of NGO Human Rights Watch, and ex US Ambassador to Venezuela, Patrick Duddy. (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.

No comments:

Post a Comment