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, July 8, 2014

July 08, 2014

International Trade

Imports arrived at Puerto Cabello
  • 6,000 tons of paddy rice from Guyana for CASA.
  • 3,000 tons of beef and frozen chicken in 64 containers from Brazil for CASA
  • 1,449 tons of green lentils in 58 vans from Vancouver, Canada, to CASA, Distribuidora Jaime García and ASOPRANA.
  • 1,400 tons of infant formula from Mococa Productos Alimenticios for General de Alimentos Nisa
  • 959 tons of frozen beef from Goncalves and Tortola for CASA
  • 958 tons of beef and frozen chicken from Rasic Hermanos for CASA
  •  Over 600 tons of infant formulas from México for Nestlé de Venezuela
  • Over 400 tons of prefabricated building components from México for Petroquímica de Venezuela (PEQUIVEN)
  • 326 tons of frozen chicken from Uruguay for CASA
  • 135 tons of cornmeal from Argentina for Dow Venezuela
  • 123 tons of diapers in 12 vans, from Procter & Gamble in Perú.
  • 100 tons of newsprint in 9 containers from the United Kingdom for Engelberg TranspIantes.
  • 156 tons of milk and 313 of skim milk in 12 containers fron Ecuador.Plus 12,000 tons of sugar arrived in the port of La Ceiba, state Trujillo, for central La Pastora in Lara.

Rice imports from Brazil rose more than 300% this year
As domestic rice producers seek official support to meet a drop in production due to the strong drought throughout the nation, their Brazilian counterparts feast on increasing paddy rice exports to Venezuela, which have grown more than 300% in the first five months of this year, according to figures from Brazil's Ministry of Foreign Trade (SECEX). This year more than 87.493 tons of paddy rice was shipped to Venezuela, exceeding by over 330% the 20,000 tons shipped here during the same period in 2013. More in Spanish: (El Mundo,

Logistics & Transport

Delta slashes Venezuela flights amid currency dispute
Delta Air Lines is the latest carrier to trim its service to Venezuela, which has seen numerous airlines trim or end service altogether amid a currency dispute with international carriers that fly to the country. Delta's cuts will be drastic, with the airline saying it will slash its Venezuela service by 85%. Delta spokeswoman Sarah Lora says the carrier will end its daily Atlanta-Caracas service on Aug. 1 and replace it with a single round-trip flight each weekend. Venezuela requires airlines to sell tickets in local bolivar currency, but carriers say they are not receiving approval from the exchange control board to turn those earnings back into dollars. The dispute has led nearly a dozen airlines including American Airlines to reduce or suspend service. The International Airline Transport Association (IATA) says the industry has the equivalent of U$D 4 billion trapped here. (USA Today,; Reuters,; El Universal,; Bloomberg,; Fox News,

Oil & Energy

PDVSA has been funded by six government agencies
Financial statements from state-run oil holding Petróleos de Venezuela (PDVSA) show that in 2007-2014, the industry, has managed to create a funding network with government agencies. Despite high oil prices, PDVSA income cannot meet major projects both in its own core areas and the programs entrusted by the Executive Office. (El Universal,


Guayana collapses under SIDOR worker protests, Maduro names general to head regional development
SIDOR union protests have collapsed Ciudad Bolívar as they closed all bridges in the city using company buses, demanding investment in plant infrastructure and the signing of collective bargaining clauses. Two buses were burned during the demonstrations. José Meléndez, Secretary General of SIDOR's main labor union (SUTISS) says buses involved in street blockages "are 100 useless units". The union is demanding action by President Nicolás Maduro on paralyzed collective bargaining negotiations at a time the steel producing complex is facing their worst production results in history. Maduro has so far refused to meet with the union while the collective bargaining contract has been over due for more than 4 years and under discussion for the last two. Workers claim lack of investment is part of a plan to privatize the company into the hands of Chinese investors. SIDOR employs around 14,000 workers and generates another 80,000 indirect jobs. The government's Guayana Corporation has now made a final offer to SUTISS which will be discussed by union members this week. Maduro this week named Major General Justo Noguera, former Commandant of the National Guard, as head of the Guayana Corporation. More in Spanish: (Correo del Caroní,; Ultimas Noticias,; and El Universal,

GM Venezuela plans 14% payroll cut as production plummets
The company has asked the Labor Ministry to authorize firing around 500 employees, freeze benefits and cut down one shift. Production dropped 88% from 2013 levels. GM plants here are designed to assemble 300 units daily and are down to 30 units daily, and are projecting some 3,800 units this year - which is around an average monthly output. Last week CHRYSLER Venezuela asked permission to dismiss 119 workers. More in Spanish: (El Mundo,

Economy & Finance

Economic Vice President Rafael Ramírez predicts a single FOREX rate
Venezuela's new economic czar, who is also Mining and Oil Minister and head of PDVSA, says other steps will be taken first, but does not elaborate on details. Ramírez also referred to pending debts, indicating “all that it is fair to pay will be paid out.” However, he emphasizes that all companies are subject to “capital risk.” Experts say establishing a single exchange rate will not in itself be effective unless fiscal discipline is established and PDVSA funding by the Central Bank and other agencies is stopped. (Veneconomy,; More in Spanish: (Agencia Venezolana de Noticias;; Ultimas Noticias,; El Universal,; El Nacional,; and more in Spanish: El Nacional,

Ramírez claims Venezuela has sufficient resources to meet external debt obligations
Economic Vice President Rafael Ramirez, says Venezuela has sufficient resources necessary to meet its foreign debt obligations: "We already have within our FOREX budget U$D 42.000 billion set aside to pay this amount. There will be no problem with debt obligations," he says. Ramírez adds that the government will put all state funds into a single account of the Central Bank of Venezuela, and says the nation wants to restructure its external obligations in order to extend due dates. (AVN,; El Universal,

Government approaches world banks
After disparaging international banks as an emblem of capitalism, the Venezuelan government has held a round of meetings with investment banks in an effort to change the country risk perception. The meetings last month in London and Caracas take place against a backdrop of a severe economic crisis that some believe is leading to a shift in the economic policies by leftist President Nicolás Maduro, and involves stiff adjustment measures over the next weeks. There was an immediate impact to efforts by Economic Affairs Vice President Rafael Ramírez, as Venezuela's country risk dropped from 970 to 914 base points. (El Universal,; and more in Spanish: El Univesarl,

Government owes at least U$D 8 billion to local industry
Eduardo Garmendia, President of the National Industrial Council (CONINDUSTRIA) says authorities have begun to provide FOREX to repay debts abroad, but only around 10-12% of the amount outstanding. He says pending debts are around U$D 8-9 billion and there is no repayment schedule. More in Spanish: (El Mundo,


Key military authorities ratified at their posts
President Nicolás Maduro has announced that Defense Minister Admiral Carmen Meléndez and the head of the Bolivarian Armed Forces Strategic Operating Command, General Vladimir Padrino López, will remain at their posts. More in Spanish: (AVN;; El Universal,
Council of State to analyze government transformation
President Nicolas Maduro has convened the Council of State for this week to tackle structural changes within the government structure, says Executive Vice-president Jorge Arreaza. Arreaza says discussions will include "a structural change of the State, including a review of all of its processes, fighting corruption and an efficient administration." (AVN,; Veneconomy,

Chinese President to visit Venezuela in July
Chinese president Xi Jinping will carry out an official tour through Argentina, Brazil, Cuba and Venezuela on July 17-23, according to Prensa Latina. (AVN,

US designates new chargé d' affairs to Venezuela, remains "concerned" over conditions here
The US government has designated a new chargé d'affairs to its Embassy in Caracas in an apparent attempt to bring about a rapprochement with the oil producing country. The position will be held by Lee MacClenny, according to a US State Department spokesperson, who would not say when the newly appointed official would arrive. State Department spokesperson Jen Psaki says the US remains "concerned" over "conditions on the ground" and "accusations made against the United States", but is open to improving the bilateral relationship. (El Universal,; and more in Spanish: Ultimas Noticias,; El Mundo,; El Universal,

In Venezuela's latest media shift, EL UNIVERSAL newspaper sold
The owners of daily newspaper El Universal have sold a controlling stake of the company to a little-known Spanish investment firm, EPALISTICIA, marking the third sale of a major media group in Venezuela since last year. The sales last year of news channel GLOBOVISION and ULTIMAS NOTICIAS, the nation's most-read newspaper, resulted in changes to editorial coverage. At GLOBOVISION, which was once ardently anti-government, there was a reduction in coverage of the opposition, and at ULTIMAS NOTICIAS management changes led to a flood of resignations and dismantling of its investigative unit. EL UNIVERSAL has been owned by the Mata family, descendants of poet Andres Mata, who created the publication in 1909. (Reuters,; Bloomberg,

Vicente Fox terms Maduro an apprentice dictator
Former Mexican President Vicente Fox describes Venezuelan President Nicolás Maduro as "an apprentice dictator," and claimed he took power due to "a vulgar imposition" by his predecessor, Hugo Chávez He added that Chávez was "liable for destroying a nation, an economy, and the dreams and hopes of millions of Venezuelans." "Mr. Maduro is an apprentice dictator. He is weak in mind, in ideas, and in skills -the product of a vulgar imposition that continues the destructive task." (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 

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