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, June 13, 2014

June 13, 2014

International Trade

Incoming cargo at Puerto Cabello:
  • 33,000 tons of soy flour from Argentina, for CASA.
  • 33, 000 tons of white corn from Mexico, for CASA
  • 30,000 tons of paddy rice from Brazil, for CASA
  • 2,428 tons, 877 kg of chicken from Argentina and Uruguay for CASA
  • 1.023 tons of printing paper from Brasil for Industria Venezolana Endógena de Papel (INVEPAL)
  • 832 tons of cheese and milk powder from Uruguay for Distribuidora Greacla and General de Alimentos Nisa
  • 680 ton of bean seeds for CASA
  • 436 tons of machinery for cargo handling for Empresa Mixta Comercializadora
  • 234 tons of medicine from Farmacuba to Fundación Oro Negro
  • 118 tons of food preparations from Italia for Inversiones Nutralia
  • Shampoo and conditioner arrived for Procter&Gamble
  • Prefabricated construction, for PDVSA IndustrialPersonal care products, milk, cream, tires, refractory bricks, frozen chicken, lentils and tomato paste.

Customs charges will adjust to the new exchange rates
Tariffs applied to incoming goods will henceforth charge at the SICAD I or SICAD II rates, as applicable. The VEB 6.30/U$D1 rate will no longer be used. More in Spanish: (Notitarde;

Customs workers protested in Vargas state to demand the repeal of the presidential decree creating the Venezuelan Foreign Trade Corporation, CORPOVEX. Protestors marched to the maritime Customs House. (Veneconomy,

Logistics & Transport

Aviation authorities give airlines five days to submit airfares, airlines insist on a signed repayment agreement
General Hebert García Plaza, Minister for Aquatic and Air Transportation has told airline representatives that the government will soon establish parameters for adjusting airfares to and from Venezuela. Once the resolution is published airlines will be required to submit their adjustments within 5 days. Major airlines operating here insist they will not reach an agreement unless the government must signs an agreement for repayment of its FOREX debt. (El Universal,; and more in Spanish: (El Nacional;

Oil & Energy

The OPEC will keep its current production decided at the end of 2011. Delegates of member nations have reached a consensus to maintain the 30 million barrels per day ceiling. (Veneconomy,

Curacao's government and PDVSA will jointly seek investors for the Isla Refinery
Officials in Curacao say their government will join PDVSA in seeking investors for the island's ISLA Refinery, which is leased to PDVSA through 2019. The 96 year old refinery requires massive investment. More in Spanish: (En Oriente,

Economy & Finance

Central Bank confirms 5.7% inflation in April, and 5.7% again in May

Barclays: "Venezuela is in the middle of an economic collapse"
Investment banks expected president Nicolás Maduro would implement an adjustment plan including FOREX rate unification, raising the price of gasoline, monetary discipline, and tax reform. However, Alejandro Grisanti, analyst at Barclay's Capital, says that the current events point in the opposite direction. "There has been no progress towards such measures. At the end of April, public expenditure jumped by 20% in real terms. In the monetary area, between late March and early April, the central bank provided VEB 75 billion (U$D 11.9 billion) to fund state-run oil company PDVSA. No FOREX rate unification can be put in place because nobody is expecting currency controls to end; therefore, the parallel FOREX market will continue to exist," explains Grisanti. (El Universal,;

Bank of America: Venezuela is undergoing a deep crisis
A recent report by Bank of America Merrill Lynch shows President Maduro's popularity down to 30% due to a deep recession and accelerated inflation. The report says Maduro has low political capital which limits his capacity to carry out economic reforms. It says accumulated economic distortions have made it impossible to stop industrial production from dropping, and says "it is not clear whether the economic team in charge of macroeconomic policy shares the same view and whether it is in sync with the team that handles microeconomic policy". More in Spanish: (El Nacional;

Talks suspended with business representatives as huge debt remains unpaid. Eduardo Garmendia, head of the National Industry Council (CONINDUSTRIA) says companies have submitted all of the information required to solve problems within the productive sector, and says the ball is in the government’s court.” (Veneconomy,

SICAD 2 fails to abate the unofficial FOREX market
The government set up the First Ancillary Foreign Currency Administration System (SICAD 1) in March 2013, in an attempt to put an end to the unofficial FOREX market, which determines prices for many goods and services, and propels inflation. Following a poor performance with SICD 1, authorities implemented the so-called SICAD 2 a year later, allowing corporations and individuals to buy foreign currency at the exchange rate of VEB 49 per US dollar, 43% below the unofficial forex rate, yet supply fails to cope with demand. Economic research firms such as BARCLAYS say that the government's determination not to allow the FOREX rate for SICAD 2 to float based on supply and demand has translated into yet another FOREX rationing system. (El Universal,

Venezuelan debt up to U$D 122.3 billion by the end of Q12 2014, due to a more bonds issued on the local market. Domestic debt closed at U$D 56.8 billion in 2013, and rose to U$D 61.2 billion in March. (Veneconomy,


Arrest warrant issued for Venezuelan opposition leaders
Venezuela's attorney general has issued arrest warrants against three prominent opposition leaders. They are Diego Arria, a former presidential candidate and United Nations ambassador; Pedro Burelli, former external director of the state oil company Petroleos de Venezuela; and Ricardo Koesling, a lawyer who has been a strong critic of the government. They are wanted for questioning in an alleged plot to assassinate President Nicolas Maduro. "Groups outside the law have violent political plans," said Attorney General Luisa Ortega. She said she would ask Interpol to issue international arrest warrants, as they may have left the country. The attorney general's office said the three were not officially charged with participating in the alleged assassination plan, but they had failed to testify in an investigation of the plot. Another opposition leader, former legislator Maria Corina Machado, has been accused of being the primary organizer of the alleged plot. She has been called in to testify on 16 June. Via Twitter, Mrs. Machado scoffed at the accusations, calling them "infamy." Ambassador Arria called plot charges a "fantastic contrivance" and says the regime is in its "terminal phase". He adds that the Venezuelan government has harassed him ever since he denounced the late President Arria in The Hague court. (BBC News,; Fox News,; El Universal,; Veneconomy,; and more in Spanish: Infolatam).

Government repression increased 485% in February and March, compared to 2013, the highest figure in the last 25 years, according to PROVEA’s report “Venezuela 2014: Protests and Human Rights”. The NGO revealed 3,127 people have been detained for protesting so far, 2,463 of whom have been arraigned in courts and 119 have been remanded. It also showed there have been 157 documented cases of torture and cruel and inhuman treatment. (Veneconomy,

Capriles calls for election of new electoral board
Venezuelan opposition leader Henrique Capriles Radonski has stressed the need for choosing the new authorities of the National Electoral Council (CNE) before engaging in any political agenda. Reference was made to the expiration of the tenure of the CNE directors. "Before talking about a constituent assembly, a vote should be held to replace the officials whose terms have expired," said the opposition leader during a meeting with workers from the state of Miranda, north Venezuela.  Capriles noted that choosing a new electoral board is vital to bring peace to the country. The Supreme Court has ruled that members of the CNE's Board whose term has expired can remain in office until the National Assembly chooses their replacements. (El Universal,; and more in Spanish:

Student protests revive as World Cup begins
Student protests have again erupted, with barricades and demonstration attuned to World Cup celebrations. Protests have taken place in Valencia, where 16 were wounded; Puerto Ordaz, where 4 students were detained; Maracay, Mérida, Caracas and the island of Margarita. More in Spanish: (El Nacional;

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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