May 13, 2014

International Trade

Incoming cargo at Puerto Cabello

• Over 7,000 tons of beef from BRF Brasil Foods S.A. and JBS S/A for CASA
• Over 4,000 tons of frozen beef and chicken from Brazil, Colombia and Argentina to the government's CASA Corporation.
• Over 2,000 tons of milk and cream in 70 containers from Costa Rica to CASA
• Over 49 tons of milk and cream from Nestlé Nederland to Nestlé Venezuela. Over 1,151 tons of milk from Centrolac S.A. and Eskimo for CASA
• Over 739 tons of frozen pork from Matadero Central, Ind. Comercial San Martín, Matadero Nuevo Carnic and Nova Terra for Corporación Venezolana de Alimentos
• 621 tons of black beans from Alba de Nicaragua S.A. (Albanisa) for CASA.
• 2,600 tons of prefabricated construction for Misión Vivienda

More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Arribaron-mas-de-7-mil-toneladas-de-carne-de-bovino-/2014/05/11/326314; El Carabobeño; http://www.el-carabobeno.com/impreso/articulo/101016/-lleg-al-puerto-carne-de-bovino-para-empresa-estatal-casa; and http://www.el-carabobeno.com/impreso/articulo/101071/-despachadas-ms-de-cuatro-mil-toneladas-de-carne-y-pollo)

FOREX available for imports down 38% since 2012

Based on data from the National Foreign Trade Center (CENCOEX), the SINTESIS FINANCIERA research firm estimates a 38% drop in imports compared to 1Q 2012, down to U$D 5.48 billion from U$D 8.77 billion. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140513/divisas-para-importaciones-caen-38-con-respecto-a-2012)

Santos seeks to renew remittances by Colombian nationals in Venezuela

Colombian President Juan Manuel Santos has asked his Treasury Minister Mauricio Cárdenas to seek ways to allow Colombian residents of Venezuela to renew remittances to their relatives in Colombia, a procedure that has been paralyzed since last February. He says some 40,000 families in North Santander province have been hit by the decision to halt remittances. He also said his government will counter the economic effects of the Venezuelan crisis on Venezuela-Colombia border through an emergency plan of jobs and credits through the Business Development Bank (BANCOLDEX). The plan will become effective in days. "Further actions to reactivate the economy through the establishment of a special economic area and a stimulus at the free zone are in motion," he said. (El Universal, http://www.eluniversal.com/economia/140512/colombias-santos-discloses-economic-plan-for-colombia-venezuela-border and more in Spanish: http://www.eluniversal.com/economia/140513/colombia-busca-solucion-a-restriccion-de-remesas-desde-venezuela)

Panama-Venezuela diplomatic relations to resume on July 1st

Panama's President elect Juan Carlos Varela says diplomatic relations with Venezuela will be reestablished on July 1st, after he talked with Venezuelan President Nicolás Maduro. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/actualidad/noticias/varela--panama-restablecera-relaciones-con-venezue.aspx#ixzz31akPB5St)

Logistics & Transport

COPA Airlines cuts 40% seating on Venezuela flights

Panama´s COPA Airlines will cut 40% from the number of seats available to flights serving Venezuela during the 2Q 2013 in order to protect itself from accumulating Bolivars within the local exchange control system. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/aerolinea-copa-reduce-40-sus-asientos-en-vuelos-a-.aspx#ixzz31ahxcHQ9; El Mundo, http://www.elmundo.com.ve/noticias/economia/empresas/aerolinea-copa-reduce-40--sus-asientos-en-vuelos-a.aspx; El Universal, http://www.eluniversal.com/economia/140513/copa-reduce-asientos-en-vuelos-a-venezuela)

Oil & Energy

Venezuela oil price continues to slip

Venezuela's weekly oil basket stayed below the country's desired U$D 100 a barrel floor and fell as expectations of rising Libyan oil exports and falling Chinese demand softened world oil prices. According to figures released by the Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending May 9 was U$D 96.22, down U$D 0.28 from the previous week's U$F 96.22. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2172627&CategoryId=10717)

FORBES Special Report: Venezuelan oil dynamics: Why the protests matter

Protests which threaten to upend the country’s status quo have drawn global interest: behind the headlines, foreign investors are carefully watching to see what will happen in a country with tremendous potential and a history of missed opportunity. It is important to distinguish the current protests from the longstanding grievances of the country’s political right. The current unrest is much broader, tapping a wide swath of politic frustrations. Spiraling inflation and unchecked violent crime have further degraded confidence in the government. Venezuela’s oil exports are unable to float the economy because although oil makes up 95% of the country’s exports, it doesn’t get paid in cash for the majority of what it ships offshore. If anything, the country’s oil income shows signs of diminishing. Decaying oil infrastructure, hostility toward foreign investment and corruption have dampened production. The result, according to Bloomberg, was a 28-year low in energy sales in 2013. With broader economic and social problems and peacocking from each side of the Venezuelan political fence set to continue, the country’s social discord seems likely to persist. With the government desperately trying to hold the country together, the odds seem long—even for the rosiest of optimists. (Forbes: http://www.forbes.com/sites/riskmap/2014/05/12/venezuelan-oil-dynamics-why-the-protests-matter/)

Commodities

POLAR finds three week respite to currency hurdle

Venezuela's largest private company Empresas POLAR says it is re-starting production of pasta halted over delays in foreign currency allocations from the government. POLAR's suspension of its pasta plant in Maracaibo last month underlined disputes with President Nicolas Maduro's government over currency controls as well as Venezuela's staple shortages. The firm says a temporary solution has been found for through the purchase of 6,000 tons of wheat from a government corporation...which would last for three weeks. (Reuters, http://www.reuters.com/article/2014/05/10/us-venezuela-economy-idUSBREA4907020140510).

Minister says 30% of automotive debt is to be paid

Land Transport Minister Haiman el Troudi says 30% of outstanding debt to the automotive industry will be paid, and that the SICAD system will provide FOREX for assembly plants. He also said a large lot of spare parts for heavy transport has arrived, under financing through the system. More in Spanish: (El Nacional; http://www.el-nacional.com/)

Authorities fix prices on LG, Sony products

The Superintendent of Fair Prices has posted new price lists for LG and Sony products in Venezuela. The lists include products such as TV sets, home theaters, video cameras, speakers, tablets, cell phones, refrigerators, washing machines, vacuum cleaners, microwaves, among others. (El Universal, http://www.eluniversal.com/economia/140512/venezuelan-govt-prices-lg-sony-products)

Brazil-Venezuela joint venture is to produce toilet paper

Venezuela's CALSA ALIMENTOS and Brazil's D'ANDREA plan to invest U$D 200 million to install a toilet paper factory in Western Venezuela. CALSA President Ángelo Geretti says production will be based on rice shoots and corn and rice remains. Financing for installing 6 conversion plants within 2 months will come from both companies and the Venezuelan government. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/actualidad/noticias/empresa-venezolana-y-brasilera-instalaran-fabrica-.aspx#ixzz31UsVPN37)

Economy & Finance

Morgan & Stanley says government prefers to service debt above economic reactivation

A report by Morgan & Stanley indicates "the government sets a higher priority over servicing foreign debt than aiding the domestic economy". It says scarcities due to a hostile business environment are at the root of the current crisis, and considers recent devaluation under the SICAD 2 system insufficient to meet the main challenge, which is a lack of FOREX. The report projects greater deterioration over the months to come. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Afirman-gobierno-prefiere-reactivar-economia_0_407959381.html)

Business reports problems within the SICAD2 FOREX supply system

FEDECÁMARAS President Jorge Roig reports problems such as insufficient FOREX availability and weak participation by PDVSA and government companies have emerged within the SICAD2 system. "When SICAD2 was launched, PDVSA and government companies were expected to trade their FOREX freely, but there seems to be an understanding - which we will ask the government to clarify - that this is only for new investment." More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/roig-han-surgido-problemas-con-oferta-de-dolares-e.aspx#ixzz31aiFKBVG; El Universal, http://www.eluniversal.com/economia/140513/empresarios-exigen-debatir-inspecciones-en-mesas-de-dialogo)

Politics

US Senate proposes 27 Venezuelan officials for human rights sanctions

U.S. Senator Marco Rubio argued for the need to impose sanctions on individuals responsible for the grotesque human rights violations occurring in the midst of Venezuela’s ongoing political crisis during the Senate Foreign Relations Committee meeting on his bill. Rubio released the names of 27 people as candidates for sanctions, which includes 10 top officials in the National Guard, 5 directors of Intelligence, Counter Intelligence Services and National Police, one Naval officer, and 5 other members of the Armed Forces, one of whom serves as Minister for Air and Aquatic Transport. It also includes four former military officers who are state governors in Bolívar, Táchira and Trujillo, along with Interior Minister General Miguel Rodríguez-Torres. Only two civilians are listed: Alexis Ramírez, Governor of Mérida state; and General Prosecutor Luisa Ortega-Díaz, the only woman identified. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2175780&CategoryId=10717; Fox News, http://www.foxnews.com/politics/2014/05/12/rubio-says-do-about-having-enough-experience-to-become-president-but-still-must/)

Bill to hold Maduro regime accountable passes House Foreign Affairs Committee

The Foreign Affairs Committee of the U.S. House of Representatives overwhelmingly voted in favor of sanctioning Maduro regime officials responsible for human rights violations in Venezuela Friday. Congresswoman Ileana Ros-Lehtinen (R-FL), Chairman of the Middle East and North Africa Subcommittee, says "the committee sends a strong message to Maduro that the United States Congress is well aware of the ongoing abuses perpetuated by his regime, and that they will not go unpunished." (Latin American Herald Tribune: http://www.laht.com/article.asp?ArticleId=2167261&CategoryId=10717)

Maduro rails at 'stupid' U.S. sanctions

President Nicolas Maduro has reacted furiously to calls in the United States for punitive measures against his government for alleged rights abuses in response to three months of street protests. Some U.S. lawmakers are urging sanctions on Venezuelan officials, or even wider measures against the economy, but President Barack Obama's government has said that may harm prospects for political reconciliation here. (Reuters, http://www.reuters.com/article/2014/05/10/us-venezuela-protests-idUSBREA4907C20140510)

Talks between authorities and the opposition to resume this week

Colombian Foreign Minister María Angela Holguín says the parties will meet on Thursday to renew dialogue to seek a way out of the current crisis. She described previous meetings as a "catharsis" after 15 years with no dialogue, and hoped they will be able to move forward now. Opposition representatives have suspended talks underway in protest over government violence against student protesters. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/gobierno-y-oposicion-retoman-el-dialogo-este-jueve.aspx#ixzz31agGyLrb; El Universal, http://www.eluniversal.com/nacional-y-politica/140513/gobierno-y-mud-retoman-el-dialogo-este-jueves)

Students demand an end to attacks by motorcycle squads, planted "evidence"

Student leaders are calling for new peaceful marches within Caracas, to assemble at the General Prosecutor's office to call for the liberation of other students detained by the military in several public areas of the city. Juan Requesens, President of the Central University Student Federation called upon the regime to stop aggressions by paramilitary groups during this activity: "We are tired of armed groups infiltrating our demonstrations and planting false evidence on us", he said. The government claims it has freed most of the 243 youth activists arrested in raids last week on street camps set up to protest against President Nicolas Maduro's socialist government. Although the government hoped the demolition of four camps in Caracas would snuff out a three-month protest movement, activists vowed the measure had only strengthened their resolve to demonstrate against Maduro. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140513/exigen-detener-a-colectivos-durante-marcha-estudiantil; Reuters, http://www.reuters.com/article/2014/05/11/us-venezuela-protests-idUSBREA4A07V20140511; The Washington Post, http://www.washingtonpost.com/world/the_americas/venezuela-sends-11-students-to-trial-frees-others/2014/05/11/9e8c8b86-d940-11e3-a837-8835df6c12c4_story.html; Fox News, http://www.foxnews.com/world/2014/05/11/venezuela-court-orders-trial-for-11-student-protesters-frees-others-arrested/)

Top court endorses decision of the Parliament's speaker on Machado

Although the Venezuelan Constitution dictates that citizens are entitled to due process of law in any "legal and administrative proceedings," the Supreme Tribunal of Justice (TSJ) upheld the decision of Parliament Speaker Diosdado Cabello, who expelled opposition Deputy María Corina Machado from office without allowing her any possible procedure for her defense. The TSJ Constitutional Court abstained from ordering the reincorporation of the legislator after considering that the deputy has not been stripped of any right as "she accepted an alternative representation in a foreign country without requesting authorization from the Parliament's speaker. As the speaker did not grant any permission, Machado lost, ipso iure, her investiture as legislator." (El Universal, http://www.eluniversal.com/nacional-y-politica/140512/top-court-endorses-decision-of-the-parliaments-speaker-on-machado)

Migration of Venezuelans to the United States is increasing, deportations drop

Growing migration of Venezuelans to the United States (215,023 legal residents) has influenced applications for asylum on grounds of political persecution. From 1998 through 2013, 2,043 petitions for asylum have been granted, 3,686 denied, and another 4,977 applications withdrawn, abandoned or took another course, according to the US Department of Justice. The number of applicants has escalated over the past 5 years (2009-2013). At the same time US Immigration and Customs Control services report deportation of Venezuelans from the US dropped to 187 cases in 2013, 52% down from 2012. (El Universal, http://www.eluniversal.com/nacional-y-politica/140512/as-many-as-10706-venezuelans-have-sought-asylum-in-the-us; http://www.eluniversal.com/nacional-y-politica/140510/number-of-venezuelans-living-in-the-us-up-135-in-14-years; and more in Spanish: http://www.eluniversal.com/internacional/140513/deportaciones-de-venezolanos-desde-eeuu-caen-al-minimo-desde-2007)

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.