August 19, 2014

International Trade

Inbound cargo at Puerto Cabello:

• Over 1500 tons of automobile parts in 186 containers from China for Corporación Automotriz ZGT.
• Over 2,200 tons of beans from China for Comercializadora El Verdugo.
• Over 2000 livestock from Brazil for the National Agricultural Health Institute.
• 47 public transportation vehicles from China for the government' National Urban Transport Foundation (FONTUR). 

More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Llegaron-al-puerto-mas-de-mil-500-toneladas-de-autopartes-2218380/2014/08/18/346810; and Ultima Hora Digital; http://ultimahoradigital.com/news/noticiaunica.php?id=49195)

Customs agents protest "unfair competition" by CORPOVEX

The National Association of Customs Agents (ASONAGA) and the Vargas State Chamber of Trade and Customs Agents (CADUAINCO) are protesting "unfair competition" by the government's Venezuelan Foreign Trade Corporation (CORPOVEX). "We have a long list of customs agents, cargo consolidators, and transport services charging that officials from CORPOVEZ, VEXIMCA and other government agencies have visited their clients offering an express privileged delivery service and guarantee the supply of FOREX from CENCOEX and SICAD 1, if they are given a power of attorney to handle their cargo", says a joint statement issued by both organizations. They additional charge that "conditions are created for blackmail, unfair competition, and the end of private agencies, proxies, transport and storage services". At La Guaira there are an estimated 350 customs agents, that provide 2000 direct jobs; and another 450 companies that provide such services at Puerto Cabello. More in Spanish: (El Universal: http://www.eluniversal.com/economia/140819/denuncian-competencia-desleal-de-corpovex)

Chinese company to ship heavy duty trucks to Venezuela

China, the Venezuelan Ministry of Transport, and the Venezuelan Foreign Trade Corporation (CORPOVEX) have signed a contract to import 5,239 heavy duty trucks - worth US$ 274 million - from JAC Motors.

JAC will also provide Venezuela with technical assistance and automotive training for the Venezuelan staff. This is the largest order of heavy duty trucks a Chinese automobile manufacturer has received outside mainland China. (El Universal, http://www.eluniversal.com/economia/140818/chinese-company-to-ship-heavy-duty-trucks-to-venezuela)

Logistics & Transport

US FAA group to inspect airlines operating toward Venezuela

General Luis Graterol, Minister for Air and Aquatic Transportation, says a group from the US Federal Aviation Authority will visit Venezuela to inspect airlines serving this country. More in Spanish: (El Nacional; http://www.el-nacional.com/)

Oil & Energy

Venezuela oil price drops to lowest level since 2012 even as Mid-East and Ukraine simmer

Venezuela's weekly oil basket fell to its lowest since June of 2012 as oil prices around the world moderated even as crises in Ukraine, Syria, Libya, Iraq and Israel boiled over as international oil markets seemed well-supplied.

According to figures released by the Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending August 15 was US$ 91.95, down US$ 0.27 from the previous week's US$ 92.22. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2347836&CategoryId=10717; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=40654&idc=4)

Commodities

Pasteurized milk production is down 90% in two years

Roger Figueroa, President of the Dairy Industry Chamber (CAVILAC) reports that production of pasteurized milk has dropped 90% over the past two years due to frozen prices on natural milk. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/produccion-de-leche-pasteurizada-ha-caido-90-en-do.aspx#ixzz3Apxcr1hg; El Mundo, http://www.elmundo.com.ve/noticias/economia/gremios/produccion-de-leche-pasteurizada-ha-caido-90--en-d.aspx

SIDOR workers will evacuate administrative staff in order to paralyze the state-owned plant completely, as per a decision taken in a workers’ assembly held outside SIDOR - in which they also burned the SIDOR’s newsletter that published an agreement reached by SUTISS’ Organization Secretary and the regime. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=40652&idc=3; El Universal, http://www.eluniversal.com/economia/140818/venezuelan-iron-and-steel-company-sidor-resumes-operations)

Economy & Finance

Central Bank disposable reserves have dropped 44%

Central Bank accounts for the first semester 2014 show disposable FOREX is now at US$ 1.752 billion, a drop of 44% from the same period in 2013. This implies there is no way to meet market demand for FOREX. In addition, PDVSA is only providing the bank with half the amount of oil dollars as production is stagnant and crude oil sales at a discount reduces FOREX income. More in Spanish: (El Universal; http://www.eluniversal.com/economia/140819/se-reducen-44-las-reservas-liquidas-en-el-banco-central)

Ramirez now says Venezuela may have two foreign exchange rates by the end of the year

Economic Affairs Vice President Rafael Ramírez is now saying the nation may have two different exchange rates - as opposed to the current three - by the end of the year, in order to simplify matters. However, he said that before doing so the government would seek to curb inflation, raise the price of gasoline, and promote a "fiscal revolution" - of which no details have been provided. He added "this (situation) is unsustainable, because we must take decisions to balance our affairs or we will have disturbances in our economy". More in Spanish: (Infolatam)

Priority sectors face distortions amid economic controls in Venezuela

The Venezuelan government has not managed to correct the distortions resulting from FOREX and price controls. Serious difficulties in accessing foreign currency are increasingly hitting productive capacity and jeopardizing the supply of priority goods. Price controls have undermined both production and the supply of food. This translates into shortages that have reached other priority sectors such as healthcare, where shortages of medicines have become more obvious. Economist Luis Vicente León, president of the DATANÁLISIS polling firm believes that "fear of the political and economic costs involved" are the reason why the Executive Office has delayed the necessary decisions to set the economy straight, because of their negative consequences in the short term. (El Universal, http://www.eluniversal.com/economia/140818/priority-sectors-face-distortions-amid-economic-controls-in-venezuela)

Politics

Maduro cabinet resigns "to contribute to the government's transformation process"

Executive Vice President Jorge Arreaza says Venezuela's cabinet has tendered their resignation in order to contribute to the process of transforming government, which President Nicolás Maduro has called "the shakeup". More in Spanish: (AVN; http://www.avn.info.ve/contenido/gabinete-ministerial-pone-cargos-orden-para-contribuir-proceso-transformaci%C3%B3n-del-estado; El Universal, http://www.eluniversal.com/nacional-y-politica/140819/ministros-ponen-cargos-a-disposicion-de-nicolas-maduro)

Survey shows Venezuela's poorest sectors blame problems on the government

Venezuela's poorest sectors believe President Nicolás Maduro has the main responsibility for the country's problems.

According to a survey conducted by research firm DELPHOS among Venezuelans belonging to strata C, D, and E, six out of ten people blame the President or his government for the two main problems in the country: Insecurity (73%) and the economy (64%), including shortages, unemployment, and inflation. When asked about the main problems facing the communities, people's main complaint refers to public utilities (78%), followed by insecurity (57%), shortages (27%), garbage disposal (18.5%), and roads (17.6%). (El Universal, http://www.eluniversal.com/nacional-y-politica/140818/venezuelas-poorest-sectors-blame-problems-on-the-government)

Opposition reaffirms unity, agrees on key points aiming at parliamentary elections

Representatives of the 25 parties and groups that make up the Democratic Unity Conference (MUD) have agreed on seven key points to continue their united effort after months of divisive language and changes at the head of the coalition. They agreed to a politically acceptable unity movement, with all individual initiatives subject to consensus, the end of separate projects, a non-aggression agreement among all parties, and targeting the regime as the common rival. They reportedly established the key guidelines for a strategic plan to renew their popular, democratic, peaceful and electoral goals, and to remain united beyond elections. More in Spanish: (Infolatam)

Mayors' association reports decentralization may end in Venezuela

The Board of Directors of the Venezuelan Association of Mayors denounced that the central government is seeking to eliminate regional decentralization here. Carlos Ocariz, mayor of Sucre municipality in Caracas, reports that the 335 mayoralties in Venezuela have budget deficits due to cutbacks in central government contributions, and voiced concerns that local municipal expenditures exceed income. (El Universal, http://www.eluniversal.com/nacional-y-politica/140818/mayors-association-reports-decentralization-might-end-in-venezuela)

Venezuelan aircraft with humanitarian supplies for Palestine has arrived in Egypt

An aircraft bearing 12 tons of humanitarian supplies from countries within the Bolivarian Alliance for the Peoples of Our America (ALBA) for the Palestinian people has arrived in Egypt, to be transferred to the Gaza Strip. (AVN, http://www.avn.info.ve/contenido/venezuelan-plane-humanitarian-supplies-palestine-arrived-egypt; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=40666&idc=1)

Colombians demonstrate against Venezuela's actions on the border

Access through Simón Bolívar de San Antonio and Francisco de Paula Santander de Ureña bridges on the Venezuelan-Colombian border has been restrained by demonstrators in rejection to strict security measures carried out by Venezuelan authorities in an attempt to deter smuggling. Workers from the informal sector claim they have been hit by the decision to restrain access on the border at night. (El Universal, http://www.eluniversal.com/nacional-y-politica/140818/colombians-demonstrate-against-venezuelas-actions-on-the-border)

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.