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.

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