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.

Sunday, June 29, 2014

June 27, 2014

International Trade

Incoming cargo at Puerto Cabello
  • 22,000 tons of wheat from Canada to Molinos Nacionales (MONACA)
  • 11,437 tons of cattle, chicken and margarine from JBS S/A.
  • 10,000 tons of unprocessed soy oil from Argentina to CARGILL
  • 578 tons of prefabricated buildings from China for Misión Vivienda
  • 120 tons of frozen tuna from Importexal Corporation for Inversora Caejer
  • 103 tons of boneless beef from Loma Bonita for Carnes El Pazo
24 ships remained at anchor, 10 of them bearing bulk food cargo (3 yellow corn, 1 white corn, 2 rice, 2 sugar, and 2 carrying soy). Five more vessels bear fertilizers, one bringing chemicals, two with general cargo, two with cattle, one carrying containers and 3 in ballast. More in Spanish: (Notitarde;;

Logistics & Transport

Cargo operations at Puerto Cabello have dropped 70% this year
Ana María D'Andrea, head of the Foreign Trade Committee at the Carabobo Industrial Chamber reports cargo operations at Puerto Cabello have dropped 70% this year, compared to 2013. More in Spanish: (El Carabobeño;

...and general port activity in Venezuela declined 8.2% between 2012 and 2013, as per a container movement ranking in Latin America and Caribbean ports prepared by the UN Economic Commission on Latin America (UNCTAD). At Puerto Cabello is shrank by 9.4% and La Guaira posted a 7.4% drop. (Veneconomy,; More in Spanish: El Universal;; El Nacional;

Domestic airlines also grinding to a halt
Humberto Figuera, President of the national Airline Association (ALAV) warns that domestic LASER Airlines could cease operations within 30 days if authorities do not pay FOREX debt due it the company so that it can pay for required insurance. More in Spanish: (El Universal,; Ultimas Noticias,

Oil & Energy

Net natural gas production rose 3.5% in 2013
PDVSA's 2013 report shows re-injection of natural gas into oil wells dropped by almost 100 million cubic feet and resulted in a net production of natural gas to 7.395 billion cubic feet daily, up from 7.327 billion cubic feet in 2012. More in Spanish: (El Universal,

PDVSA got U$D 2.8 billion in credit from housing fund in 2013
State-run Petróleos de Venezuela (PDVSA) broadened its funding sources within the government. It also received cash from the Fund for Reconstruction, the fundraising unit for housing programs. Financial statements reveal that during FY2013, PDVSA received a U$D 2.8 billion credit from this fund and repaid it at the end of last year. (El Universal,


Food consumption down for five months in a row
Consumer trends reflected in sales tabulated by the Venezuelan Chamber of Food Processing Industries (CAVIDEA) show a decrease of 5.98% in April-May. The index has slumped for five months in a row due to lower production caused by price regulations which do not allow the industry to meet production costs. (El Universal,; More in Spanish: El Universal,; Ultimas Noticias,

NESTLÉ plant is now paralyzed 
Workers at the GERBER-NESTLE plant in Valencia are protesting because operations have been paralyzed for the past two weeks due to a lack of lids for jars in compotes and other products there. Rafael García, Secretary General of the plant's labor union says 200 jobs are at risk and production is down to 9000-10000 tons from the usual 14000 tons per year. More in Spanish: (El Nacional;

Yellow corn production paralyzed due to lack of seeds
Aquiles Hopkins, Vice President of the Agriculture Producers Confederation (FEDEAGRO) reports delays in yellow corn seed distribution have caused months old supply delay by state company AGROPATRIA, and is hurting corn flour production. He reports the deficit in supply is around 40¡%. More in Spanish: (El Carabobeño;

Government is lacking funds to subsidize powdered milk
A ton of imported powdered milk costs more than U$D 5000 and the government absorbs U$D 1,200 of this amount to keep it regulated. Official imports by CASA have shrunk due to losses in operations, ad sales on the domestic market fell 50% from last year. More in Spanish: (El Nacional;

Economy & Finance

Government is divided on FOREX unification proposed by Ramírez
Unofficial sources report serious divisions have emerged within the government after Economic Affairs Vice President Rafael Ramírez announced that the foreign exchange rate will be unified. Reformers, headed by Ramírez, Central Bank President Nelson Merentes and Finance Minister General Rodolfo Marco Torres are reported to be convinced that policy changes should lead to a single foreign exchange rate around VEB 23-25/U$D, have said there should be a public debate on adjusting gasoline prices and are proposing working with the private sector to improve production, reduce scarcities and lower inflation. More in Spanish: (El Nacional;

Financial markets anticipate adjustments and, country risk drops
Venezuela's international borrowing rate has dropped dramatically, from 14% on February 20th to 8.8% today on market expectation of economic adjustments on the part of the Maduro regime after the firing of Planning Minister Jorge Giordani. Adjustments have now been expected for the past 17 months. More in Spanish: (El Universal,

FITCH projects high inflation and a drop in GDP
FITCH Ratings expects Venezuela's economy to suffer high inflation and recession this year. It believes GDP will drop 1% and inflation will remain above 50%. More in Spanish: (El Universal,; Ultimas Noticias,

SICAD 2 meets only 20% of trade and service needs
Mauricio Tancredi, President of the National Trade and Service Council (CONSECOMERCIO) reports that the new SICAD 2 foreign exchange device has met only 20% of the needs within their area. He calls the system "slow, a device to access scarce currency". More in Spanish: (El Universal,

SICAD 1 system excludes over half of companies seeking FOREX
Out of 6779 companies that have requested FOREX through the SICAD 1 system in 8 out of 15 auctions carried out to date this year, some 4619 were left out of the process. CADIVI reports 68% of requests have been rejected for failing to comply "with criteria established within the bidding process, did not meet their tax obligations for 2012 or have been suspended by the National Foreign Trade Center”. (El Mundo,

U$D 2 billion in back debt repaid to private sector
FEDECÁMARAS President Jorge Roig reports that payment of 30% of the government's outstanding debt to the private sector is being paid but is insufficient. He says around U$D 2 billion out of a total of U$D 10 billion have been repaid,  but warned that a unified exchange rate is indispensable. More in Spanish: (El Mundo,; El Universal,

Foreign direct investment here reportedly rose by U$D 7 billion or 119%, mainly in the oil sector, according to the 2014 World Investment Report by the United Nations Conference on Trade and Development (UNCTAD). (Veneconomy,; More in Spanish: El Nacional;


Hard-line leftists growing impatient with Venezuela's socialist administration, Maduro demands "loyalty"
President Nicolas Maduro is facing a new threat from an unlikely place: old-school leftists who accuse him of betraying the socialist legacy that carried him to power. Orthodox socialists are grumbling over liberalized currency reforms they say are counter to the revolution. The tensions came to a head when Maduro fired Planning Minister Jorge Giordani, a Marxist economist whose Spartan lifestyle and anti-capitalist doctrine earned him the nickname "the Monk." Maduro has responded to criticism by saying "endless loyalty" is the most important aspect in a revolution, and called for loyalty and discipline among its leaders. He also threatened dissident ministers with expulsion from the ranks of the ruling PSUV party. Dissident former ministers responded by saying that the real traitors to the revolution are those involved in corruption. International affairs specialist María Teresa Romero points out that "all this clarifies that division within government ranks is not so much between the military and pro-Cuban civilians, but the real polarization is between the ruling “troika” (Maduro, Cabello y Ramírez) and true communist believers who are more honest about financial and economic corruption". (Fox News,; El Universal,; and more in Spanish: Infolatam)

Capriles says anyone demanding an accounting is called a traitor
Opposition leader Henrique Capriles slammed the government for labeling as "traitors" all those who demand an accounting on corruption: "U$D 25 billion disappeared and no one seems to be responsible. They stole all the funds for food, medicine and all that is necessary here and now that say anyone demanding an accounting is a traitor".  More in Spanish: (El Nacional;

Human Rights Watch asks UNASUR to confront abuses in Venezuela
Human Rights Watch has asked the Union of South American Nations (UNASUR) to “exhort the Venezuelan government to immediately face the serious human rights situation" in this country. It says that human rights units within the UN and the European Parliament have expressed their concern, UNASUR "has yet to speak out on the very serious abuses perpetrated by Venezuelan government agents". More in Spanish: (Infolatam)

Venezuela seeks place on the UN Security Council
Venezuela is working to secure votes necessary to take one of the two seats assigned to Latin America within the UN Security Council as Argentina's term ends this year. It has reportedly obtained backing from at least 40 out of the 129 necessary votes. 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.

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