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, July 11, 2014

July 11, 2014

International Trade

Imports arrived at Puerto Cabello
  • 25,999 tons of yellow corn from Louisiana, for PROAGRO C.A.
  • 24,999 tons of soybean meal from Louisiana, for Agrolucha C.A., Grupo Souto, Granja Alconca and Avícola La Guásima
  • 23,530 tons of wheat from Canadá for Molinos Nacionales C.A. (MONACA)
  • 16,217 tons of assorted foodstuffs, including margarine, beef, chicken, powdered milk powder and cream for CASA.
  • Over 12,000 tons of food in 380 containers from Brazil for CASA
  • 9,000 ton of degummed crude soybean oil from Argentina for CARGILL de Venezuela and PROVENCESA C.A.
  • 4,100 of heads of cattle from Brazil
  • 2,272 tons of whole milk and margarine from Brazil for CASA.

Two opposition legislators denounce major corruption in rice imports from Argentina
Two COPEI party opposition legislators, Abelardo Díaz and Homero Ruiz, have asked the Prosecutor General to start a criminal investigation of former Food Minister General Félix Osorio who negotiated a food cooperation agreement between Argentina and Venezuela. Díaz says "a major fraud has been committed against our nation for over U$D 15.5 billion in up to 30% overcharges on imports of more than 37,000 tons of paddy rice, and an estimated 80% overcharges on 41,000 tons of rice imported from Argentina”. He says these commodities were exported by a company named BIOARTS, which is reported to have a monopoly on paddy rice and corn exports to Venezuela and has "no previous activity in cereals, and much less in exports”. Rice growers in Argentina made the original charge in local media there. More in Spanish: (Notitarde,; El Mundo,;; El Nacional;; El Nacional,

Logistics & Transport

Minister claims Venezuela owes airlines nothing
General Luis Graterol, Minister for Water and Air Transport says international airfares should be set at the exchange rate of the first Ancillary Foreign Currency Administration System (SICAD 1) of VEB 10.8/U$D. "There should be no further distortion" in this area, he says. "The exchange baseline is Sicad and we invite people to learn about the value of their tickets." Graterol reports 21 out of 24 international and domestic airlines operating in Venezuela have delivered their rate brackets to the government. (El Universal,; and more in Spanish: Agencia Venezolana de Noticias;

AA, Venezuelan government discuss payment schemes
American Airlines Group says it will keep on working with Venezuelan authorities on dates and applicable exchange rate for the repatriation of funds owed by Venezuela for ticket sales. (El Universal,

Air France-KLM cuts profit target on overcapacity, cargo, fallout from a dispute with Venezuela
Air France-KLM Group (AF), Europe’s largest airline, cut its full-year earnings forecast amid overcapacity on North American and Asian routes, poor demand for freight and the fallout from a dispute with Venezuela. Earnings before interest, tax, depreciation and amortization will be 2.2 billion Euros (U$D 3 billion) to 2.3 billion Euros this year, compared with a previous target of as much as 2.5 billion euros, Air France said in a statement. In 2013 the airline group reported Ebitda of 1.86 billion Euros. (Bloomberg,

Venezuela's airport 'breathing' tax
The biggest international airport in Venezuela is charging a fee for the right to inhale clean air. At Maiquetia International Airport in Caracas has passengers flying out now have to pay 127 bolivars tax for the air they breathe to cover the cost of a newly-installed system which uses ozone to purify the building's air conditioning system. But with outgoing tickets already expensive and scarce because of Venezuela's economic crisis, many on social media have responded to the tax with both humor and outrage. Radio presenter Daniel Martínez tweeted: "Could you explain to me the ozone thing in Maiquetia? The toilets don't have water, the air-con is broken, there are stray dogs inside the airport, but there's ozone?" (BBC News;

Land Transport Minister says construction of third bridge over the Orinoco river is 65% completed
Construction of the third bridge over the Orinoco River, which connects the states of Bolivar and Guarico, located in the south of the country, is 65% completed, according to Land Transport Minister Haiman El Troudi. The cable bridge will span 11 kilometers of elevated structure, with a 90 foot deep excavation in the center of the Orinoco River. As a result the bridge will have a height of 232 meters, which is equivalent to a 92-story building, from the bedrock of foundations to the top of the central towers. The Minister says around U$D 2.8 billion dollars have been invested in this megastructure, which has generated more than 13,500 direct and indirect jobs. (AVN,

Oil & Energy

PDVSA tax obligations calculated using the exchange rate of VEB 6.30/USD
The Central Bank of Venezuela (BCV) has decided the exchange rate of VEB 6.30/U$D  will be used to calculate tax duties on state-run oil holding Petróleos de Venezuela (PDVSA), its partners and service providers. PDVSA will sell oil income at VEB 6.30/U$D, and funds for investment will be offered at the exchange rate of the second Ancillary Foreign Currency Administration System (SICAD 2), of around VEB 50/U$D. (El Universal,

Santa Rosa gas complex in Anzoátegui is operating normally after completing a depressurization process, says PDVSA. The company explained a routine operational procedure to include the controlled burning of gas in the pit was carried out to replace a blocked valve in a pipe. Anaco residents had reported an explosion and fire in the complex. (Veneconomy,

Economy & Finance

Bloomberg ranks Venezuela as the worst global country risk among emerging nations
Bloomberg has just published a ranking of “Scariest Places on the Business Frontiers” in which Venezuela appears as the riskiest place among 43 emerging nations, after Nigeria, Egypt, Pakistan and Argentina. Bloomberg's global risk indicator is prepared with the Zurich Insurance Company, based on 35 financial, economic and political indicators for each country. More in Spanish: (EnOriente;

Venezuela's consumer confidence is lowest in Latin America
According to a Nielsen report consumer confidence in Venezuela is now at 76%, the lowest in Latin America.  Market analysts say that although there have been two minimum wage adjustments here so far this year, buying power has not recovered due to 60%+ inflation, expected new devaluations and scarcity. More in Spanish: (El Nacional,

Reactionaries within the government hold back exchange rate unification, propose dual exchange
A group of extreme leftist reactionaries, led by Executive Vice President (and Chavez son-in law) Jorge Arreaza, is strongly resisting exchange rate unification as announced by Economic Affairs Vice President Rafael Ramírez. They instead propose a dual exchange rate under the control of the National Foreign Trade Center (CENCOEX). Arreaza has the support of Planning Vice President Ricardo Menéndez, CENCOEX President Alejandro Fleming, and Foreign Minister Elías Jaua, who argue that devaluation will bring about great political cost. More in Spanish: (El Nacional;

Demand for FOREX by far exceeds supply
Every week the government calls for bidders to take part in a US dollar auction sale within the Ancillary Foreign Currency Administration System (SICAD), but demand for FOREX exceeds supply by far. Based on official figures, demand was for U$D 3.9 billion in eight out of 16 auctions, but only U$D 1.4 billion (36%) were actually sold. The National Foreign Trade Center (CENCOEX) –the body convening auctions - says companies that fail to meet all the requirements to take part in the auctions, or those either suspended or failing to pay taxes properly are dismissed. (El Universal,

Auto parts chamber reports 82% drop in trade
José Cinnirella, Vice President of the Auto Parts Dealers Chamber (CANIDRA) says the sector has shrunk around 82%, which is a downturn similar to that of carmakers in Venezuela. (El Universal,;


Government calls on the opposition to resume talks
After a meeting of the national Council of State Executive Vice-President Jorge Arreaza reaffirmed President Nicolás Maduro's calls on the different sectors "to settle differences within the framework of the Constitution”. "We thought the opposition would come, but it did not," Arreaza said. "We have pondered the possibility of incorporating not only dissenters from the Unified Democratic Panel (MUD), but all the sectors of the Venezuelan society," he added. (El Universal,

Former Presidential candidate Capriles says the dialogue with the government will continue frozen until those detained for political reasons are released. Miranda Governor Henrique Capriles reiterated it is the government that has to answer for the country’s problems and not the opposition. He also called on all of the opposition to channel public dissatisfaction "more forcefully", and demanded a new Elections Board to bring about change through "transparent" elections. At the same time, the Andrés Bello Catholic University (UCAB) has demanded that national authorities release all the students detained for protesting and stop the ongoing legal persecution. (Veneconomy,; and more in Spanish: Infolatam)

El Universal buyer betting on political change in Venezuela
A representative of the acquiring parties says the acquisition of Venezuelan newspaper El Universal, which has so far been critical of the Maduro regime, is a bet that a political shift in the country will ease restrictions on media companies and opposition groups. “They are convinced that this is going to happen,” says Jose Luis Basanta when asked if they were expecting political change in the country. (Bloomberg,

Canada dismisses J.V. Rangel's claim is a "pure fabrication"
The Canadian government, through its ambassador to Caracas, Ben Roswell, answered claims by journalist José Vicente Rangel, a former Chavez Vice President, who has hinted that the Canadian diplomatic mission took part in destabilization. "The government of Canada absolutely rebuts the charges (made by Rangel), which are a pure fabrication" says the diplomat. (El Universal,

MERCOSUR Summit will be held in Caracas on July 29, according to Paraguay’s Foreign Affairs Minister. The summit has been postponed three times and was originally scheduled for December 17, 2013; then postponed for January and later for February. In the end, it had no scheduled date due to the Venezuelan political crisis. (Veneconomy,

SPECIAL REPORT: Who rules Venezuela?
The death of a charismatic leader such as Hugo Chavez, along with the ascent of a less popular official such as Nicolás Maduro has created a power vacuum in Venezuela, which is currently being covered by a de facto triumvirate (Maduro-Diosdado Cabello y Rafael Ramírez) that has the backing of Cuba's Castro regime. Foreign Minister Elías Jaua himself has admitted that "no one, no Bolivarian or Chavista, can ignore how serious, how complex it is not to have commandant Chavez at the head of the Bolivarian revolution". Political analyst Alfredo Keller says "it is obvious that Nicolás Maduro has not been able to impose a personal regime, such as Chavez had. What we have here is a triumvirate in which each member needs the other. Chavismo has become a bunch of interests in which internal tension prevails in the absence of the leader that held them together".  According to analyst Agustín Blanco Muñoz, “this revolution is dominated by a military cabal coordinated by Diosdado Cabello and connected to Cuba's G2, which places civilians led by Maduro at a disadvantage”. Rafael Ramírez and his group of technocrats were recently strengthened by Maduro, who personally ratified Ramírez - who controls all funds - as Venezuela's new economic czar and denounced a "brutal campaign" aimed at "destroying him". Ramírez is not expected to do away with exchange controls, but rather establish a new single rate within a system of brackets, and is reported to be negotiating the adjustment -including price increases and a reduction in social programs - with the business community. Economic analyst Rubén Marcano says what lies ahead is "the mother of all devaluations". More in Spanish: (Infolatam)

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.

No comments:

Post a Comment