International Trade
Incoming cargo at Puerto Cabello
- Over 25,000 tons of soy flour from Bunge Latin
América for Nutrición Técnica (Nutritec), Concentrados Valera C.A. y
Savarian C.A.
- 25,000 tons of wheat from Canada's Gavilon Grain
for Fábrica de Pasta La Especial
- 25,000 tons of raw cane sugar from Ed & F Man
Brazil S.A. for C.A Azúcar, Moliendas Papelón y Central El Palmar S.A.
- 6,000 tons of rice from Guyana Rice Development
Board for the Corporación de Abastecimiento y Servicios Agrícolas (CASA),
government agency.
- 2,512 tons of milk and beef from Argentina's Frigorífico
de Aves Soychu y Sancor Cooperativas Unidos for CASA.
- 385 tons of shoes for ladies from Hanour Lane
Shipping China for Lilly & Associates
33 ships remain at bay awaiting dock assignment. More
in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Llegaron-25-mil-toneladas-de-trigo-a-Puerto-Cabello-2270226/2014/10/28/376325; http://www.notitarde.com/La-Costa/Mas-de-300-toneladas-de-zapatos-para-dama-llegaron-al-puerto-local-2271123/2014/10/29/376593)
Legislators criticize food imports, denounce "big business deals"
National Assembly representative
José Manuel González has criticized large scale imports of agricultural
products that hurt local farmers in the middle of their corn and rice
harvesting. He says that "big
business deals" are behind these imports, and adds that these cases
have been repeatedly denounced in the Assembly but are "unfortunately
tabled by the Comptroller Committee". Gonzales says imports may be
necessary to cover domestic deficits, but should not come at harvest time and
become unfair competition to local production. Representative Iván González
joined the criticism, saying "irrational
imports of these commodities fill up silos, and add another ingredient that
stifles Venezuela's productive sector." More in Spanish: (Ultima Hora Digital; http://ultimahoradigital.com/news/noticiaunica.php?id=52120; http://ultimahoradigital.com/news/noticiaunica.php?id=52118)
Venezuela negotiates settlement with Panama
Panama's Minister of Trade and Industries, Melitón
Arrocha arrived here to discuss an agreement for Venezuela to settle the
billion dollar debt it owes Panamanian companies. Venezuela owes over US$ 1
billion to Panamanian companies, including COPA Airlines, the pharmaceutical
industry, and companies in the Colon Free Zone, according to Panamanian
authorities. (El
Universal, http://www.eluniversal.com/economia/141029/venezuela-negotiates-settlement-of-debt-owed-to-panama)
Logistics
& Transport
Venezuela's Shipping Association decries port
operations delays
Eddy Meayke, President of
Venezuela's Shipping Association, says "we are very worried by the dislocation of authorities, excess
bureaucracy and controls that delay the performance of ships". He
explains the delays cause added import expenses and possible frequency
cancellations, and ads: "A ship
takes 3-5 days in port, and here in Venezuela it can take 15 days, this makes
the business unfeasible". The Association estimates that the drop in
volume by the private sector is 50% or more. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/empresas/asociacion-naviera-alerta-sobre-retrasos-en-operac.aspx#ixzz3HicnhgzH)
Protests paralyze Puerto Cabello docks
Stevedores working for the
port authority, BOLIPUERTOS, paralyzed entry into the docks of Puerto Cabello,
demanding the discussion of their collective bargaining agreements. Cargo
vehicles were forced to part close to the port as demonstrators sought to meet
with agency officials. More in Spanish: (El Universal; http://www.eluniversal.com/economia/141030/protesta-paraliza-actividad-de-muelles-de-puerto-cabello)
Oil &
Energy
Algeria bucks OPEC discounts as crude goes to Venezuela
Algeria raised its
oil price for November to the highest in five months after adding fellow OPEC
member Venezuela to the list of
its mostly European customers. The North African country will sell its Saharan
Blend crude at a premium of 70 cents a barrel to Dated Brent, the benchmark for
more than half of the world’s oil, according to a price list obtained by
Bloomberg. That’s the highest level since June and an increase from 20 cents in
October. The first supertanker of Algerian crude arrived in Venezuela on Oct.
25, according to ship tracking data. (Bloomberg, http://www.bloomberg.com/news/2014-10-29/algeria-bucks-opec-discount-trend-with-venezuela-oil-sale.html)
U.S. Virgin Islands announces sale of Venezuelan refinery
The U.S. Virgin Islands announced that Venezuelan
state oil company PDVSA and Hess Corp have reached a tentative agreement to
sell the now-idle HOVENSA refinery to Atlantic Basin Refining. Located on the
south shore of Saint Croix, HOVENSA has the capacity to process 500,000 barrels
per day, but PDVSA and Hess shut it down in 2012 amid weak demand. Atlantic
Basin Refining is “a company formed
specifically to acquire the shuttered refinery,” Virgin Islands Gov. John
de Jongh Jr. said in a statement. “The
company is headed by a group of individuals with experience in refining, energy
finance, oil trading and environmental restoration.” (Latin American Herald
Tribune, http://www.laht.com/article.asp?ArticleId=2358589&CategoryId=10717)
2.2 billion cubic feet of gas have been added to
proven reserves
Venezuela's proven gas
reserves are now 197 trillion 89.211 billion cubic feet, says the Ministry of
Oil and Mining, after incorporating new reserves in Maracaibo, Maturín,
Barcelona, Barinas and the Orinoco Oil Belt. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/venezuela-incorpora-más-22-millones-pies-cúbicos-gas-sus-reservas-probadas;
El Universal, http://www.eluniversal.com/economia/141031/suman-22-millones-de-pies-cubicos-de-gas-a-las-reservas;
El Mundo, http://www.elmundo.com.ve/noticias/petroleo/gas/venezuela-incorpora-mas-de-2-2-millones-de-pies-cu.aspx)
Economy
& Finance
Venezuela quelling default talk spurs bond surge
Venezuela is rewarding bond investors with their
biggest gains in five years as it quells default speculation. To Stone Harbor
Investment Partners LP and Barclays Plc, the rally has just started. The
nation’s US$4 billion of notes due 2027 have soared 9.5% since Oct. 27, the
best two-day surge since January 2009, after the state oil producer made good
on a bond payment, the government abandoned the sale of its U.S. refining unit
and devaluation speculation increased. Venezuelan debt returned 8% in the last
two days, compared with 0.7% for all emerging markets, according to JPMorgan
Chase & Co. indexes. The rally is also due to on speculation the government
is considering economic changes including a currency devaluation. The country’s benchmark notes due
in 2027 rose 2.54 cents today to 65.68 cents on the dollar at 1:21 p.m. in New York.
The extra yield, or spread, investors demand to buy the country’s bonds due in
2016 instead of U.S.
Treasuries fell 2.24 percentage points to 18.61%, down from
29.44% two weeks ago. Deutsche Bank has recommended that their more
conservative clients buy long term Venezuelan bonds, particularly PDVSA' s 2037,
their longest term bond, which was priced at 45.57%, with a current 12.07%
yield and a 5.5% semester coupon. It rise 3.44 points this week. (Bloomberg, http://www.bloomberg.com/news/2014-10-30/venezuela-quelling-default-talk-spurs-bond-surge-andes-credit.html;
http://www.bloomberg.com/news/2014-10-29/venezuelan-bonds-rally-most-in-five-years-on-devaluation-wagers.html;
El Universal, http://www.eluniversal.com/economia/141029/venezuelan-bonds-recover-following-pdvsas-debt-repayment;
and more in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/deutsche-bank-recomienda-compra-de-bonos-venezolan.aspx#ixzz3HcmKQ3ut; http://www.elmundo.com.ve/noticias/economia/mercados/bonos-venezolanos-repiten-jornada-con-fuerte-alza.aspx)
Economists project that inflation to close at 110% in
2015, low oil prices to force adjustment
As spending will Economist Pedro Palma, a former
President of Venezuela's Academy of Economic Sciences, estimates the economy
will contract by 4 points GDP this year due to dropping oil prices, he says economic
distortions will cause inflation to hit 75% by the end of the year, and go
above two digits next year. "We are
projecting inflation around 110% in 2015 and an average price of US$ 75 for the
oil barrel." Top economic analysts meeting in Caracas agree that a
drop in income will force the government into an economic adjustment. Alejandro
Grisanti, head of research and strategy for Latin America at Barclays Capital,
says oil prices will drop further other the next three quarters and begin to
recover in mid 2015. He says this will force the Venezuelan government to act,
more so increase next year and past expropriations must be paid for. Asdrúbal
Oliveros, of ECOANALÍTICS, says part of the adjustment will lead to changing
exchange policy, and points out that the current average exchange rate is VEB
21.2/US$1 and is estimated at VEB 34.9/US$1 in 2015. He also says devaluation
will also bring further FOREX restrictions for the private sector and will
become insufficient. More in Spanish: (El Nacional; http://www.el-nacional.com/; and El Universal, http://www.eluniversal.com/economia/141030/estiman-que-baja-en-el-precio-del-crudo-obliga-a-un-ajuste)
Venezuela among the countries with most obstacles to
starting a business
According to the Doing Business report 2015, prepared
by the World Bank, there has been an overall improvement in the business climate
in Latin America and the Caribbean, as well as an increase in regulatory
reforms and more solid institutions. "Sixteen
of 32 economies in Latin America and the Caribbean implemented at least one
regulatory reform making it easier to do business in the year from June 1,
2013, to June 1, 2014," the World Bank document entitled Doing
Business 2015: Going Beyond Efficiency highlighted. As for the ease of doing
business ranking, out of 189 economies, Venezuela ranked 182. "Venezuela made starting a business more
difficult by increasing incorporation costs," the report noted. (El
Universal, http://www.eluniversal.com/economia/141029/venezuela-among-the-countries-with-more-obstacles-to-start-a-business)
FOREX allocations down to US$ 50 million/day
Recent foreign debt payment has made an impact on
Venezuela's international reserves, and the scarcity of funds is mirrored in the
allocation of foreign currency for imports. While authorities claim that allocation
of FOREX is up to date, the SÍNTESIS FINANCIERA think tank has noted that the UD$
1.5 foreign debt service shrank allocations.
Based on the estimates, settlements in foreign currency dropped from US$ 180 million a day in August-September, to a US$ 50 million daily average in October. (El Universal, http://www.eluniversal.com/economia/141029/forex-settlement-lowers-to-usd-50-millionday)
Based on the estimates, settlements in foreign currency dropped from US$ 180 million a day in August-September, to a US$ 50 million daily average in October. (El Universal, http://www.eluniversal.com/economia/141029/forex-settlement-lowers-to-usd-50-millionday)
Infrastructure financing to come from Development Fund
(FONDEN) and Chinese Fund
The government has decided
that large scale project financing will no longer come from ordinary income
each fiscal year, it will instead draw funding from the National Development
Fund (FONDEN) and the Chinese Fund. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/financiamiento-a-la-infraestructura-saldra-del-fon.aspx#ixzz3HWo1KJs4)
Treasury to get VEB 191 billion more
The Finance Ministry
estimates it will receive some VEB 191.5 billion in additional income, 80% of
which is from extraordinary oil income. More in Spanish: (El Universal, http://www.eluniversal.com/economia/141031/fisco-tendra-bs-191-millardos-en-ingresos-adicionales)
US Court distributes US$265 Million in Venezuela PDVSA
pension fund Ponzi
The US Federal Court in Connecticut has approved a
receiver's plan to distribute assets to the victims of the fraud allegedly
perpetrated by Connecticut-based hedge fund manager Francisco Illarramendi, and
approved an initial distribution amount of US$264,580,160 from the assets
recovered to date. In January 2011, the SEC charged Illarramendi and various
entities owned or controlled by him, including investment adviser’s High view
Point Partners, LLC, and Michael Kenwood Capital Management, LLC, with engaging
in a multi-year Ponzi scheme. (Latin American Herald Tribune: http://www.laht.com/article.asp?ArticleId=2358531&CategoryId=10717)
Politics and
International Affairs
Maduro rejects criticism of 45% military pay hike
President Nicolás Maduro has rejected criticism of his
regime's decision to raise military pay by 45% starting November 1st. The
military got a 30% pay raise last May, and another 60% raise last year. Opposition
leader Henrique Capriles said: "He
thinks that he will remain in power by keeping the military happy",
and has also criticized the enormous share of power Maduro has given the
military. Columnist María Teresa Romero points out: "It is suspect that he has announced the salary increase only days after
removing Diosdado Cabello's close military ally (General Rodríguez Torres)..It
is not surprising that Venezuelans speak insistently of "saber rattling"
in the post Chavez era." Maduro
complained of "attacks by the
extreme right", and said the opposition would "divide and destroy" the Armed
Forces. The military have received close to 500% pay raises since 1999, and
many Venezuelans are upset by privileges granted to the military - over other
public servants - amid rampant inflation. Doctor Douglas Natera, head of
Venezuela's Medical Federation, remarked: "a general can earn 4 times more than a hospital director". More
in Spanish: (Infolatam)
Venezuela again bars Inter American Human Rights
Commission from visiting
German Saltron, Venezuela's
representative to the Inter American Human Rights Commission, again rebuffed a
petition by the Commission to visit Venezuela - which it has refused since 2002
- by claiming the Commission "supported
the 2002 coup", and accused 90% of international and local media of
aggression. Commissioner Felipe González says this situation places Venezuela
in an "exceptional"
position within the region. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/141029/gobierno-ratifico-negativa-a-cidh-para-visitar-al-pais; El Nacional; http://www.el-nacional.com/)
Venezuela recalls ambassador to Spain for
consultations over Rajoy comment; López balks trial
Venezuela is calling back its ambassador to Spain for
consultations in protest over Spanish Prime Minister Mariano Rajoy's call to
free a Venezuelan opposition activist jailed for leading protests against
President Nicolas Maduro. Conservative Rajoy met the wife of Venezuelan protest
leader Leopoldo Lopez last week, tweeting a photo with an exhortation for him
to be freed and protests allowed. In a short statement, the foreign ministry of
Venezuela said they would conduct a broad revision of bilateral ties due to
Rajoy's "interference." In
the meantime, López announced he would not attend any more hearings until Judge
Susana Barrientos decides on the UN’s Group for Arbitrary Detentions’
recommendation to release him immediately. (Reuters, http://www.reuters.com/article/2014/10/28/us-venezuela-spain-diplomacy-idUSKBN0IH2DR20141028;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41674&idc=1http://www.veneconomy.com/site/index.asp?ids=44&idt=41676&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/141029/lopez-refuses-to-attend-trial-until-un-resolution-is-replied; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2358581&CategoryId=10717)
Voting is the way to change, say 69% of Venezuelans
At least half Venezuelans are afraid that the
government will not respect election results. Yet they still trust in voting as
a tool for dispute settlement and resolution of problems in Venezuela. Based on
the findings of the case study "Citizen's
perception of the electoral system," coordinated by the Center for Political
Studies at Andrés Bello Catholic University, 17.8% "fully disagrees" and 32% "disagrees" with the
statement according to which the Venezuelan government will abide by any
election results. (El
Universal, http://www.eluniversal.com/nacional-y-politica/141030/voting-is-the-way-to-change-according-to-69-of-venezuelans)
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.
