International Trade
Cargo arrived at Puerto Cabello:
- Over 1,900 tons of milk from Cooperativa Nacional
de Productos Agrícolas and ECOLAT, for state agency CASA.
- Over 780 tons of infant formula milk from Nestlé México S.A. for Nestlé Venezuela.
- 290 tons of powdered whole milk from Mundial Cargo.
- Over 390 tons of shampoo and soap from Procter & Gamble México.
- Over 160 tons of washing machines and spare parts from Honour Lane Shipp Nanjin Bra for Lilly &
Associates
- Over 120 tons of frozen beef from Lorsinal S.A. for Distribuidora de Alimentos Finos
C.A.
Private imports have dropped 70% so far this year at La
Guaira
Eduardo Quintana,
Vice President of FEDECÁMARAS-Vargas, says "The siege against private importers is increasing. There is no vessel
traffic congestion at the docks and the container port that looks naked to the
eye".
Compared to 2013, he added, so far this year, there has been a drop of 70% in private imports. More in Spanish: (El Nacional; http://www.el-nacional.com/)
Compared to 2013, he added, so far this year, there has been a drop of 70% in private imports. More in Spanish: (El Nacional; http://www.el-nacional.com/)
Logistics
& Transport
Only 61 of 124 aircraft in Venezuela's domestic fleet
remain active
Venezuela´s Airline Association warns that only 61 out
of 124 aircraft in the nation's domestic fleet remain active. 18 are awaiting
certification or operating permits, and 45 are in planned or unplanned
maintenance. More in Spanish: (El Universal, http://www.eluniversal.com/economia/141015/de-124-aviones-que-consta-el-parque-aereo-nacional-61-estan-activos)
American Airlines, LUFTHANSA to increase flight
service to Venezuela
General Rodolfo Marco Torres, Vice President for
Economic Affairs met with American Airlines representatives and announced that
the airline will increase flights in two cities "in the next few months". German airline LUFTHANSA also
announced it will increase weekly flights to Venezuela from three to four
during the winter season. More in Spanish: (AVN; http://www.avn.info.ve/contenido/american-airlines-se-reunió-gobierno-e-informó-que-aumentará-frecuencia-vuelos; http://www.avn.info.ve/contenido/lufthansa-incrementa-vuelos-venezuela; El Nacional; http://www.el-nacional.com/)
Outsourced workers threaten to paralyze Puerto Cabello
port
Outsourcing has increased at Puerto Cabello port as
the Port Authority (BOLIPUERTOS) has been turning stowage work over to other
companies which use some 2,000 workers that do not benefit from minimum wages
and only collect when they service ships. They are now seeking better working
conditions and have threatened to paralyze activities if they are not heeded.
More in Spanish: (Notitarde, http://www.notitarde.com/La-Costa/Trabajadores-tercerizados-amenazan-con-paralizar-el-puerto-2250882/2014/10/14/362586)
Oil &
Energy
Global oil glut sends prices plunging
Oil prices posted their biggest one-day drop in nearly
two years as a U.S.-led wave of crude crashed into weak global demand,
threatening the stability of some countries and providing an economic lifeline
to others. World-wide demand is stagnant, and the International Energy Agency
cut its full-year oil-demand growth forecast to the lowest level in five years.
U.S. output is expected to increase again this year, and Venezuela could veer
into political crisis because of sharply lower crude prices, some analysts say.
Venezuela was already running low on hard currency because of rampant spending
at home and other problems. When prices of oil were close to US$ 100 a barrel
earlier this year, Venezuelans across the country rose up to protest shortages
and what many leaders of the demonstrators called the government’s bungled
management of the economy. OPEC – has not heeded Venezuela’s calls for an
emergency meeting. Indeed, Saudi Arabia, Iran and Iraq, which account for half
of OPEC’s output, are currently selling crude to Asian buyers at a discount in
order to maintain market share. Asdrubal Oliveros, head of Caracas-based
consulting firm ECONANALITICA, said Venezuela has few options. “Venezuela can generate as much noise as it
wants within OPEC, but it’s Saudi Arabia that calls the shots,” he said.
(The Wall Street Journal, http://online.wsj.com/articles/global-oil-glut-sends-prices-plunging-1413334648)
Venezuela is importing oil for the first time in
history
Venezuela is reported to be expecting a shipment of
crude oil from Algiers on October 26th. The government has had to take this
step in an attempt to cut expenses amid the drop in oil prices and its own
inability to increase short term production. Extra heavy crude oil from the
Orinoco belt requires mixing with other components so that it can be refined
locally. The high cost of gasoline used for mixing requires cash payment and
weighs heavily in PDVSA accounts. Venezuela has instead decided to sign a
supply contract for Algerian Saharan Blend, to save on FOREX. It may also cut
crude shipments that do not generate income, such as its swap agreements within
PETROCARIBE. Oil production here shrank by 195,000 BPD in the Q2 2014, and is
now reported close to 2,700,000 barrels. More in Spanish: (El País, http://internacional.elpais.com/internacional/2014/10/17/actualidad/1413502704_182767.html)
Economy
& Finance
Oil price fall
triggers new fears of Venezuela default, benchmark bonds yield highest since
financial crisis
The fall in the oil price has further fomented
worries of a possible default, pushing up Venezuelan bond yields to more than
18% and boosted credit default swaps to over 2,230 basis points. Venezuela has
continued to insist that it will meet its international bond obligations,
despite international reserves falling to an 11-year low of US$ 20 billion.
Yet, although the country also has low debt-to-GDP ratios, this has not calmed
default fears. Analysts are dusting off their spreadsheets to see at what
energy price a default by Venezuela might be inevitable. Francisco Rodríguez,
senior economist at Bank of America Merrill Lynch, believes the country could
continue to service its debt at oil prices as low as US$ 60 a barrel – but only
if Caracas also takes a series of politically difficult moves, such as slashing
domestic gasoline subsidies and its subsidized oil program to Cuba. “There are things the government could do,
although they have not yet, that could make US$60 oil sustainable,” he
said. Others believe the crunch could come at a higher oil price. Russ Dallen,
of Caracas Capital Markets, estimates that PDVSA’S cost of production is around
US$ 66 a barrel for its heavy oil mix, which in turn is trading at a US$ 7
discount to global oil price benchmarks. After taking into account the extra
revenues that the country needs to finance imports rather than just oil
production, Dallen estimates Venezuela’s “sovereign
break-even oil price” is above US$ 100 a barrel, significantly higher than
current oil prices. (Financial Times, http://www.ft.com/intl/cms/s/0/b7a2ee04-5478-11e4-84c6-00144feab7de.html?siteedition=intl#axzz3GL0EGsCm;
Reuters, http://www.reuters.com/article/2014/10/16/venezuela-debt-idUSL2N0SB1P720141016
Oil slide puts Maduro
under pressure for reforms... he claims there will be surplus income
The slump in global oil prices has heightened
pressure on President Nicolas Maduro to enact politically risky reforms to bolster
Venezuela's weak public finances and its ability to pay down debt. Crude prices
under US$ 85 have given new voice to reformers within Maduro's government, and
critics outside, who say he needs to make urgent changes. "The government continues to study the
changes ... The decisions will come bit by bit," a senior official at
state oil company PDVSA said, explaining a package of reforms that were mooted
earlier this year and include unifying a complex system of exchange rates -
effectively devaluing the bolivar currency. Maduro himself has ruled out the
possibility that falling oil prices may hit the Venezuelan economy. "We have made provisions for any scenario,"
Maduro says. He further says "82 is
still good for us. So much so that we will have surplus oil income". (Reuters,
http://www.reuters.com/article/2014/10/16/venezuela-oil-idUSL2N0SA01B20141016;
Bloomberg, http://www.bloomberg.com/news/2014-10-16/venezuela-goes-from-bad-to-worse-as-oil-prices-plummets.html;
El Universal, http://www.eluniversal.com/economia/141016/nicolas-maduro-rules-out-slowdown-driven-by-drop-in-oil-prices;
http://www.eluniversal.com/economia/141016/president-maduro-oil-prices-will-bounce-back; and more in Spanish: El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/maduro--petroleo-a--82-por-barril--sigue-siendo-bu.aspx#ixzz3GObTP8c0; El Universal, http://www.eluniversal.com/economia/141017/maduro-asegura-que-caida-del-petroleo-no-afectara-la-economia; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/venezuela-tiene-margen-de-maniobra-en-un-escenario.aspx#ixzz3GOWY14qJ)
Venezuela scales
October debt mountain but population still pays price
Venezuela’s government has resisted calls from
a leading political opponent to default on its debts. But its decision to pay
bondholders has raised concerns that it is ordinary citizens who will pay the
price. Venezuela has begun to pay the US$ 4.5 billion in debt maturity payments
owed by the sovereign and by oil company PDVSA. But while bondholders may
breathe more easily, analysts say devaluation is needed urgently as the country
continues to suffer excess demand for dollars. Following the payment, the bonds
duly rebounded somewhat. Venezuela and PDVSA’s maturity schedule is now
relatively spread out until 2017. Francisco Rodríguez, Bank of America Merrill
Lynch economist, told Emerging Markets the market was not paying attention to
the fact that the country’s imports have fallen around 40% at the same time as
it faced a reduction of dollar inflows. “There
is a perception in the market that Venezuela needs an economic adjustment,”
said Rodríguez. “But the market is
missing the import contraction... Venezuelan citizens are paying an excessive
cost for this adjustment... The government is shooting itself in the foot here.
It’s eroding its capacity to pay for goods and service by effectively handing
out a dollar subsidy to some people, and paying for that via inflation tax.”
(Emerging Markets, http://www.emergingmarkets.org/Article/3389525/Financial-Markets/Venezuela-scales-October-debt-mountain-but-population-still-pays-price.html)
Local industries owe foreign suppliers over US$
10 billion, cannot plan on new credit for 2015
Ismael Pérez Vigil, Executive President of the
National Council of Industries (CONINDUSTRIA) says domestic industries here owe
foreign suppliers a backlog of around US$ 10-11 billion since 2010 which
prevents them from opening new credit lines abroad, despite efforts by the
National Foreign Trade Center aimed at establishing a FOREX plan for 2015. More
in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/industria-debe-al-extranjero-mas-de--10-000-millon.aspx#ixzz3GOaPTEY5; El Universal, http://www.eluniversal.com/economia/141017/la-deuda-con-proveedores-limita-planificacion-para-2015)
Venezuela's debt
insurance costs surge on oil price drop
The cost for insuring Venezuelan sovereign debt
against default or restructuring surged on Wednesday as global oil prices
swooned to a 27-month low before rebounding, illustrating rising investor
concerns over the OPEC member nation's ability to service its debt. (Reuters: http://www.reuters.com/article/2014/10/15/venezuela-debt-cds-idUSL2N0SA2AJ20141015)
Politics and International Affairs
Nominating Committee selected by National
Assembly to cover Election Board vacancies
The National Assembly
reached a qualified agreement on 10 members for a Nominating Committee that
must select new Elections Board authorities. The only opposition party
abstaining was Proyecto Venezuela. More in Spanish: (AVN; http://www.avn.info.ve/contenido/aprueba-comité-postulaciones-electorales; El Universal, http://www.eluniversal.com/nacional-y-politica/141015/designacion-de-rectores-del-cne-puede-demorar-64-dias; El Nacional; http://www.el-nacional.com/)
Prosecutor General
rejects UN "meddling" with the
López case, UN High Commissioner "very
concerned"
Prosecutor General Luisa Ortega Díaz says the
"recommendations" issued by
the United Nations Working Group on Arbitrary Detention in connection with the
case of imprisoned opposition leader Leopoldo López is not binding. She
described the resolution as "meddling."
Díaz remarked that international organizations cannot give orders to Venezuela
in any matter because "we are a
sovereign, free and independent country." Zeid Ra’ad al Hussein, the
UN Commissioner for Human Rights says he is "very worried" about the López case and planned to meet with Lopez's
wife in Geneva. Lopez himself sent a message from his jail cell demanding that
the government abide by instructions from the UN Work Group on Arbitrary
Detentions. (El Universal, http://www.eluniversal.com/nacional-y-politica/141015/venezuelan-attorney-general-rejects-un-meddling-with-lopezs-case;
and more in Spanish: El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/141017/desde-su-celda-lopez-exigio-al-gobierno-acatar-a-la-onu)
...and Venezuela joins
UN Security Council
With 181 votes in favor, the Bolivarian
Republic of Venezuela was elected to serve as non-permanent member in the
United Nations Security Council, as the sole candidate from Latin America and
the Caribbean. (AVN, http://www.avn.info.ve/contenido/venezuela-joins-security-council;
http://www.avn.info.ve/contenido/venezuela-get-voice-peace-truth-freedom;
El Universal, http://www.eluniversal.com/nacional-y-politica/141016/venezuela-wins-a-seat-on-the-un-security-council; More in Spanish: CNN Español, http://cnnespanol.cnn.com/2014/10/16/venezuela-nuevo-miembro-no-permanente-del-consejo-de-seguridad-de-onu/)
1,6 million may have
migrated from Venezuela since 1999, almost 90% of college level
In the absence of official data, research by
Tomás Páez of the Central University indicates the exodus of Venezuelans since
1999 could be as high at 1.6 million, which is 5.5% of its 29 million total populations.
Almost 90% of them have attended college or hold degrees. The number of
Venezuelans applying for US resident visas has grown steadily since 2011 up to
9,500 in 2014. An additional 21,725 were granted student visas, more than
double those in 2009. Over 10,000 Venezuelans hold valid Colombian
identification cards, according to that nation's Foreign Ministry. More in
Spanish: (El Nacional, http://www.el-nacional.com/mundo/millones-personas-emigrado_0_502149944.html)
Special Report: Murder
in Venezuela: Most foul
Bound and beaten, with multiple stab-wounds to
the chest, the body of Robert Serra, a 27-year-old member of parliament for
Venezuela’s ruling party, was found at his Caracas home on the night of October
1st. His female assistant, María Herrera, had also been stabbed to death. Almost
before the blood was dry, many leading government spokesmen, including
President Nicolás Maduro, were already attributing the crime to “hired killers” working for the
opposition. Democratic Unity (MUD) alliance leaders immediately condemned the
murders and called off a planned demonstration to avoid stirring up animosity.
Diosdado Cabello, a former army officer who serves as president of the National
Assembly, said he felt “threatened”
and filed a complaint with prosecutors. Maduro twice vowed to present “within hours” the conclusions of police
investigations which would supposedly vindicate his claim of an opposition
plot. The Democratic Alliance (MUD) demanded a professional, criminal and
scientific investigation of the case, one that is not conditioned by political
interests. It declared that "it is
unacceptable for political leaders to issue value judgments without
investigating, point to culprits and appear as spokespersons for an
investigation". Maduro now says a Colombian paramilitary group was
behind the killing of Serra and his partner. Maduro said Serra's bodyguard had
confessed to conspiring with a Colombian gang to kill the member of the
National Assembly. He also said he would "get to the masterminds of Serra's murder inside or outside of the
country". Colombian Foreign Minister Maria Angela Holguín has said she
will discuss the matter next week with her Venezuelan counterpart, Rafael
Ramírez. A further twist to the tale came almost a week after the double
murder, when the center of Caracas was brought to a halt for several hours by a
supposed gun-battle between police and what were officially described as “gang members” wanted for murder. Five of
the latter died in the shoot-out, some of them allegedly executed by police. They
were members of the “collectives”, a
term now virtually synonymous in Venezuela with groups of civilian gunmen
working as enforcers for the government. The most prominent of them, a former
policeman by the name of José Odreman, who had been filmed and photographed
with many leading government leaders, including President Maduro himself.
Speculation is now rife as to whether factions within the government are at
odds over reining in the armed collectives, whose “social cleansing” activities are often combined with common crime
and who may even have been involved in the Serra case. While the police, who
answer to the interior minister, General Miguel Rodríguez Torres, may have good
reason to disarm and neutralize gangsters—whatever their political
allegiance—some government ministers continue to see the collectives as an
essential element in the defense of the revolution. In a further twist, warrants against six Scientific, Criminal and
Forensic Investigation Agency (CICPC) officials were later issued for the
events that resulted in the death of the five members of two pro-government
collectives. The warrants were issued barely hours after members of some 50
collectives protested outside the CICPC’s headquarters on Wednesday, and distanced
themselves from any groups involved in crime. Ramiro Andrade, member of one collective,
stressed that it was an unarmed group, which belongs to the Bolivarian
militias. However, he noted their group relied on weapons solely provided by
the State, and that such firearms would be used when necessary only. (The
Economist, http://www.economist.com/blogs/americasview/2014/10/murder-venezuela?fsrc=scn/tw_ec/most_foul;
BBC, http://www.bbc.com/news/world-latin-america-29642445?utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief%20War%20Dogs%20PROMO;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41493&idc=1;
El Universal, http://www.eluniversal.com/nacional-y-politica/141016/pro-govt-groups-lodge-document-with-investigation-agency;
and more in Spanish: El Nacional; http://www.el-nacional.com/;
El Universal: http://www.eluniversal.com/nacional-y-politica/141017/holguin-tratara-con-ramirez-senalamientos-en-el-caso-serra)
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