International Trade
22 ships are at bay in Puerto Cabello
22 ships remain at bay at Puerto Cabello awaiting dock
assignment. Eight of them carry 198,000 tons of food, 5 of them consigned to
state agency CASA: Two bear yellow rice, one white rice, one sugar and another
rice. Other vessels are bringing fertilizers to state agency PEQUIVEN, and
237,000 tons of cement from Cuba for the PDVSA government oil company. More in
Spanish: (El Universal; http://www.eluniversal.com/economia/140930/22-buques-fondeados-en-la-bahia-de-puerto-cabello)
Imports are a four year low, with a 21% drop, according
to the National Statistics Institute. Their report says 58.8% of all imports
were carried out by the private sector and the remainder by the government and
its agencies. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/las-importaciones-se-colocan-en-el-nivel-mas-bajo-.aspx#ixzz3EnPbLGFD)
Venezuelan, Russian foreign ministers to strengthen
economic, commercial relation
Venezuelan foreign minister Rafael Ramirez met last
Saturday in New York with his Russian counterpart, Serguei Lavrov, to discuss
agreements by the two nations on economic and commercial matters. They agreed
that Ramírez would visit Moscow soon in the coming weeks. (AVN, http://www.avn.info.ve/contenido/venezuelan-russian-foreign-ministers-strengthen-economic-commercial-relation)
Logistics & Transport
Maduro asks Marco to "solve" airline ticket availability issue
President Nicolás Maduro charged Economic
Affairs Vice President General Rodolfo Marco Torres with meeting with
international carriers and solve the problem with airline ticket availability. "If only one remains, let only one remain
...whoever wants to work with our rules is welcome, but if there is only one
left we will have to manage", he said. He accused carriers of taking
part in alleged "economic warfare"
in order to "isolate Venezuela".
More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/empresas/maduro-pide--resolver--disponibilidad-de-boletos-a.aspx#ixzz3EnQ0U9jQ)
Oil &
Energy
PDVSA will reactivate some 1,000 oil wells in the west of the country, says its
President Eulogio Del Pino, with a project that seeks to boost PDVSA’s
production stagnated around 3 million barrels per day (bpd). The undated pilot
project aims to increase production between 60,000 and 70,000 bpd. (Veneconomy,
http://www.veneconomy.com/site/index.asp?ids=44&idt=41218&idc=4)
Venezuela oil price
falls again to new 3 years low
Venezuela's weekly oil basket fell to a 3 year
low this week. 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 September 26 was US$ 86.65, down US$ 1.74
from the previous week's US$ 88.39. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2354105&CategoryId=10717)
Commodities
CLOROX concerned over safety after Venezuelan
government’s takeover
The CLOROX Co said it has serious concerns over the
safety of its plants, after the Venezuelan government took over its facilities
just a week after the company’s announcement of discontinuing operations in the
country. Following the news of the cleaning-products maker’s departure, the
Venezuelan government announced a takeover of the company’s plants. CLOROX had
been manufacturing cleaning liquids, bleach, and other disinfectants at these
plants, and is now concerned over the safety of the workers and adjoining
communities. The decision to discontinue operations in Venezuela came as a
result of the economic crisis that the country is currently facing. The
Oakland, California-based company reported that it had been selling two-thirds
of its products at prices set by the state. This resulted in losses, as the
prices couldn’t even cover the manufacturing costs of the products. (Bidnessetc,
http://www.bidnessetc.com/26454-clorox-concerned-over-safety-after-venezuelan-governments-takeover/)
Economy
& Finance
Bank of America sees Venezuela with ample funds
available for debt service
A recent report by Bank of America repeats that
Venezuela is fully capable of meeting upcoming debt service payments. It says
cash holding are well above requirements and "provide ample space for
maneuvers". It estimated the consolidated public sector has US$ 9.6
billion in consolidated public funds, including US$ 1.9 liquid reserves at the
Central Bank, US$ 1.6 billion at FONDEN and US$ 5.1 in PDVSA accounts, among
others. It also estimates US$ 30.4 billion in semi-liquid assets that can be
quickly converted if authorities decide to. Last amount includes US$ 15.2
billion in gold. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140930/bank-of-america-ve-holgura-en-venezuela-para-honrar-deuda)
Venezuela's currency
hits record lows on black market
The plummeting Venezuelan currency breached a
new, symbolic low of 100 bolívares per dollar on the black market Friday,
according to market-tracking websites, in a sign of the worsening greenback
shortage faced by President Nicolás Maduro's government. Economists say the
bolívar is collapsing as Venezuelans clamor for dollars to protect themselves
from an inflation rate topping 60%. But the government, which tightly restricts
access to dollars, has cut the supply this year, prompting the value of the
bolívar to plunge in unofficial street transactions. Officials this month banned companies with tax
arrears from accessing the secondary currency market, pushing them to the informal dealers,
according to Tamara Herrera, chief economist at Caracas-based consultancy
Sintesis Financiera. The
lack of dollars—evidenced by mounting debts with private companies such as
airlines and importers that service the country—has sparked fears of a
potential default, since the country has more than U$$ 6 billion in bond
payments due over the next three months. The bolívar dropped to 100.7 per
dollar Friday, according to a website that tracks Venezuela's parallel market,
where individuals and businesses go when they are unable to buy hard currency through
strict government regulations. That makes 100-bolívar note, the largest bill
printed by Venezuela's central bank, the equivalent of $1. A greenback fetched
around 40 bolívares on the street a year ago. Polls show President Maduro's
popularity has dropped this year, with the country plagued by shortages of
basic goods ranging from motor oil to pain medications as dollars for imports
go scarce. And despite frequent promises to correct Venezuela's economic woes,
analysts say the government has so far failed to deliver meaningful measures. "It doesn't look like the market has much
confidence in the government's ability to get things under control,"
said Russ Dallen, partner at brokerage Caracas Capital Markets. Venezuela's
central currency board, known by its abbreviated name Cencoex, offered nearly
30% fewer dollars to the local economy in the first half of this year at its
most-subsidized exchange rate, compared with the same period in 2012. The
government hasn't published data on its dollar sales for 2013. The central
bank's international reserves meanwhile are down 29% to US$ 21 billion since
the start of 2013. (The Wall Street Journal, http://online.wsj.com/articles/venezuelas-bolivar-currency-hits-record-low-on-black-market-1411782623;
Bloomberg, http://www.bloomberg.com/news/2014-09-26/venezuela-s-biggest-bill-buys-buck-on-black-market-as-bonds-due.html)
Venezuela faces 27 disputes
at ICSID
Venezuela's accounts payable will increase in
the event of further rulings against the State in pending arbitration.
Last week, Canadian mining company Gold Reserve
Inc. informed that the International Center for Settlement of Investment Disputes
(ICSID) had determined Venezuela had to pay the Canadian firm US$ 740.3 million
after expropriations in two gold mining projects in the oil producing country.
The award has not been disclosed yet nor has
the government released any statement on the issue. Yet this could be just one
of the many cases to be defined at the ICSID. (El Universal, http://www.eluniversal.com/economia/140929/venezuela-faces-27-disputes-at-icsid)
Politics
Venezuelans gather
signatures against Maduro, Elections Board says process is not legal
Hard-line opponents of President Nicolas Maduro
began collecting signatures Saturday seeking to force a constitutional assembly
and remove the socialist leader before presidential elections in 2019. Analysts
consider the petition campaign launched in Caracas by the Popular Will party
led by jailed activist Leopoldo Lopez to be a long shot. Gathering and
verifying signatures from 15% of registered voters, or nearly 3 million people,
would be a logistical nightmare in any country. But in deeply polarized
Venezuela, where loyalists dominate government institutions and the courts,
opponents of Maduro fear the National Electoral Council would find a way to
invalidate signatures and expose them to retaliation. The current initiative
lacks the full support of the Democratic Unity alliance of more than 20 opposition
parties, and the Venezuelan National
Electoral Council (CNE) will not validate the signature collection process.
It says the call, by popular initiative, without the intervention of the
Electoral Power “lacks any legality.”
(UT San Diego, http://www.utsandiego.com/news/2014/sep/27/venezuelans-gather-signatures-against-maduro/ and Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41228&idc=1)
Insulza: Opposition
cannot dialogue if dissenting leaders are in prison
José Miguel Insulza, Secretary General of the
Organization of American States (OAS), says dialogue is "pivotal" to solve the crisis in the
country, as he referred to government-opposition talks on hold here. However,
he added, "the opposition cannot
seat at the table (to hold talks) when several of its leaders are in jail.
Although they might not want to hold a dialogue, they are still part of the
opposition". "Gestures," are required, he said. (El
Universal, http://www.eluniversal.com/nacional-y-politica/140926/insulza-opposition-cannot-dialogue-if-dissenting-leaders-are-in-prison)
UN to assess
Venezuela's effort against torture
What steps have been taken to eradicate
torture? How many officers have been punished for such a crime? This and some
other questions will need to be answered by the Venezuelan authorities next
November 6-7 at the United Nations Committee against Torture (CAT), which will
assess the actions taken to prevent such violation of human rights.
Authorities intend to point to the Special Law
to Prevent and Impose Sanctions for Torture and Other Cruel, Inhuman, and
Degrading Treatments passed by the National Assembly on July 2012. (El Universal,
http://www.eluniversal.com/nacional-y-politica/140929/un-to-assess-venezuelas-effort-against-torture)
Bloomberg: Chavez
friends get rich after his death as Venezuela slides into chaos
In an oil-rich country run by leaders who’ve
promised to create a socialist economy that benefits the poor, millions of
people struggle every day to find the basics. In this nation blessed with abundant
natural resources, it’s the friends of Chavez and his ministers who have
accumulated wealth. Some of the beneficiaries of doing business with the
government live in mansions and luxury apartments, own horse farms in Florida,
travel by private jet and play polo. Chavez -- and later Maduro -- made some of
their friends rich with lucrative government contracts, says Henrique Capriles,
the governor of the state of Miranda. “There’s
nothing more capitalist than a socialist in power,” he says. One area where
Chavez’s chosen few wield immense power is in the distribution of food. The
state food system has been riddled with deficiencies, lax accounting, loss of
documents and lack of auditing and oversight, the Comptroller General of the
Republic found in an April report. Venezuela’s flawed food distribution system
fails the public, while enriching people with political connections, says Neidy
Rosal, a legislator in Carabobo state who has investigated mismanagement in the
system for five years. The government has gradually been giving the military a
bigger role in the food distribution system, legislator Rosal says. By
showering contracts on former military officials and pro-government business
executives, Chavez put a new face on the system of patronage here. “Chavez just changed the way the patronage
worked, bringing new people into the system,” says Kim Morse, a professor
of Venezuelan history at Washburn University in Topeka, Kansas. “The old upper class was replaced by the
nouveau riche favored by Chavez.” “These
are the scuffles among the insiders for a cut of the business,” Capriles
says. “Today, one is useful to them.
Tomorrow, he’s persecuted for not giving them the cut they wanted.”
(Bloomberg, http://www.bloomberg.com/news/2014-08-12/venezuela-sees-chavez-friends-rich-after-his-death-amid-poverty.html)
New cars for the Army as Venezuelans line up for food
Venezuela’s national parade ground at the Fort Tiuna military base presents
a scene that local civilians can only dream of -- stalls laden with goods and
no waiting lines. The market with everything from subsidized meat to baby
strollers, along with loans, new cars and apartments, are perks provided to the
armed forces as the economy contracts, poverty rises and President Nicolas Maduro’s popularity sinks to a
record low. The benefits help ensure the loyalty of the military, while
siphoning reserves away from the poor who have seen wage growth fall behind
inflation, according to analysts, citizen activists and academics. (Bloomberg, http://www.bloomberg.com/news/2014-09-29/venezuelan-army-enjoys-meat-to-cars-denied-most-citizens.html)
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.