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, November 28, 2014

november 28, 2014

International Trade


Cargo that has arrived at Puerto Cabello:

  • 30,000 tons of sugar from Brazil, for Central Azucarero Portuguesa.
  • 30,000 tons of sugar from Brazil, for Banco Universal.
  • 6,000 tons of rice from Guyana, for CASA.
  • Over 3,000 tons of auto parts from Ica Intl Automóviles for Corporación Automotriz ZGT.
  • Over 951 tons of food in 39 containers, from Brazil fro state agency CASA.
  • Over 552 tons of soy oil, from Bunge Alimentos, for  CASA
  • Over 399 tons of frozen beef, from Sertrading S.A. for CASA

  • Over 275 tons of Chinese fireworks for the Christmas season, for Pirotecnia Premium C.A. and Royal Light And Fire.
  • 74 tons of toys in 12 containers, from China, for Festimoda C.A., Vibración, among others.
  • Smaller quantities of clothing, shoes and tires have also arrived.


Shippers say Puerto Cabello slowest port in the Caribbean; government owes them US$ 137.8 million

Eddy Meayke, President of Venezuela's Shipping Association, says the problem at the Puerto Cabello terminal is that the handling of containers is extremely slow, and causes delays and losses to shipping lines.  In some cases shippers have been forced to leave cargo at transit points such as Panama and Cartagena. He says there has been no meeting with the management of the port authority, BOLIPUERTOS, in order to help shippers and authorities to plan jointly, and points out that conditions are better at La Guaira. Meayke says other Caribbean ports offload at a rate of 35-40 movements per hour, and in "Puerto Cabello it is at best 8 movements per hour".  He also reports the government owes the main foreign shipping companies that service Venezuela around US$ 137.8 million due to delays in returning standard and refrigerated containers, and says a situation similar to the crisis with airlines could emerge here. More in Spanish: (El Nacional,



Logistics & Transport


Venezuela suspends private flights in security operation

Venezuelan authorities has halted flights by private jets leaving from seven airports in a campaign to crack down on drug trafficking and review flight permits. The operation did not affect commercial flights at the country's main airport outside Caracas. Standing on an airstrip around dawn, Vice President Jorge Arreaza told state TV the efforts were meant to "eradicate the illicit trafficking of drugs as well as the illegal use of commercial or private planes." (Reuters,



Oil & Energy


Venezuela is getting ready to face “hard timesafter the collapse of oil prices, says PDVSA’s Chief Eulogio del Pino. He claims the government is preparing “for the worst scenarios” and warned “complicated times” are ahead. (Veneconomy,


Venezuela to keep seeking 'fair' oil price despite OPEC reverse, says countries can act individually

Venezuela will maintain contact with non-OPEC countries to seek a "fair" global oil price, says Foreign Minister Rafael Ramirez, despite OPEC's refusal to cut output as the country had aggressively pushed for. Saudi Arabia blocked calls from poorer members of the OPEC oil exporter group for production cuts to arrest a slide in global prices, sending benchmark crude plunging to a fresh four-year low. The decision is a blow to Venezuela's flailing economy, widely believed to be in recession, and also highlights the country's diminished influence in OPEC, which it helped found. Ramírez also said several OPEC member nations may deal  with price fluctuations individually, and not as organization member. (Reuters,; El Universal,; Veneconomy,; Bloomberg,; and more in Spanish: El Nacional,, Correo del Orinoco,, Últimas Noticias,; Panorama,


Venezuela sets final CITGO bids for December

Bankers representing Venezuela have set a date for prospective buyers to submit revised offers for CITGO Petroleum Corp, a subsidiary of state-run oil holding Petróleos de Venezuela (PDVSA), according to people familiar with the matter, despite denials by Finance Minister General Rodolfo Marco Torres. Lazard Ltd, the investment bank hired by PDVSA to explore a sale of CITGO, has set a late-December deadline for new offers, three people familiar with the situation said this week, Reuters reported. (El Universal,


CONOCO says PDVSA sells CITGO to avoid paying arbitration awards

Venezuela's state-run oil company Petróleos de Venezuela (PDVSA) is using the sale of its CITGO Petroleum Corp refining assets to hinder the ability of CONOCOPHILLIPS to collect an expected arbitration award, the US oil company said in a Texas court filing. Evidence indicates PDVSA is liquidating its CITGO interests "to remove the proceeds from the United States to Venezuela or elsewhere with the specific intent to hinder, delay or defraud its creditors," CONOCO said in a petition for court approval to investigate that claim. (El Universal,


El Palito Refinery is processing at one third capacity - some 52,000 bpd since its FCC unit was reactivated two weeks ago, according to union leader Marcos Sabariego. He says that before the FCC was stopped, the refinery was producing between 60,000 and 80,000 bpd. (Veneconomy,





Steelmaker SIDOR's production down 13.3% from 2013

José Luis Hernández, President of the steelmakers union, reports the plant is showing a sustained decline in its production levels since 2008. State-run SIDOR might end the year with an output of 1.3 tons of liquid steel, 13.3% under the 1.5 million tons reported in 2013. The union leader says the steelmaker is reporting a sustained decline in its production levels since 2008. He explained that the factory has an installed capacity to produce 4.6 million tons of liquid steel; however, due to several factors, operations have been reduced gradually and systematically over the last years. (El Universal,



Economy & Finance


Venezuela's public sector foreign assets estimated at USD 16 billion

Barclays Capital reports that Venezuela's public sector foreign assets amount to US$ 16.2 billion, including the available balance in the National Development Fund (FONDEN) and the Chinese Fund, plus deposits in foreign currency in the Economic and Social Development Bank of Venezuela (BANDES) and the National Office of the Treasury. However, this is 24% below US$ 21 billion last year. The firm says that including international reserves, Venezuela's total assets are US$ 37.8 billion; and reports the government is again planning a roadshow this year to improve communications with international investors. (El Universal,; and more in Spanish El Nacional,


China loosens debt terms for Venezuela

China has loosened repayment terms on the nearly US$ 50 billion in loans it has granted Venezuela since 2007. Analysts say Beijing’s flexibility may buy Maduro more time. Beijing’s largess may appear irrational given economic policies in Venezuela that do not appear sustainable, says Barbara Kotschwar of the Peterson Institute for International Economics. “On the other hand,” Ms. Kotschwar said, “they are so invested in Venezuela’s oil industry that they may have calculated that a political crisis would have a negative impact on their return on investment or on Venezuela’s repayment of loans.” China has scrapped the requirement that Venezuela ship at least 330,000 barrels of oil a day as payment for its existing loans. The reduced shipments of Venezuelan crude to China reflect the surplus in international oil markets as well as the Chinese economy’s slower growth, but they also amount to a mutually beneficial arrangement. Venezuela can divert more of its oil to cash customers, instead of using it for debt repayment. China, meanwhile, can play the long game, helping stabilize the Venezuelan economy while keeping the door open to an important market for its oil-services, drilling, mining, appliances and construction companies  (The Wall Street Journal,


Venezuela's economy could contract 4.5% in 2014

 Although the Central Bank is not providing timely economic data, private researchers believe Venezuela's economy could plunge by 4.5% in 2014. The huge drop in domestic goods and serves is estimated in a contraction of -4.5%, -4.4% and -3.9% during the 1st, 2nd and third quarter of this year. More in Spanish: (Notitarde,


Venezuelans dollarize Christmas bonuses as bolivar dives

The bolivar declined the most this month since January as Venezuelans use their Christmas bonuses to buy U.S. dollars amid the world’s fastest inflation and shortages of basic goods. A dollar fetched a record 128.18 bolivars on the Colombian border today, compared with the official exchange rate of 6.3 bolivars, according to, a rate-tracking website. The currency has lost 20% of its value in unofficial trading this month. Consumer price increases and shortages of everything from cars to milk are pushing Venezuelans to buy greenbacks, said a black market currency trader in Caracas, who asked not to be named because the activity isn’t legal. The trader said demand for dollars is the highest he has seen since hyperinflation in 1996. Money supply rose 6.4% in the second week of November as workers received their traditional annual bonuses, according to data compiled by Bloomberg. That was the biggest increase since October 2009. (Bloomberg,


Expert says unified FOREX rate could fix economic mismatch in Venezuela

Economist Tamara Herrera, director of the Síntesis Financiera think tank, says the government should try to work on a single foreign exchange rate around VEB 25 per US$, in order to balance the, improve its cash flow and meet its needs.

The main problems faced by the Venezuelan economy include multiple foreign exchange rates, State's intervention in international trade, arbitrary provision of foreign currency, and arrears.  (El Universal,


Venezuela loses another expropriation case at World Bank’s ICSID tribunal

Chilean airport operator IDC and Swiss partner FLUGHAFEN Zürich have won an arbitration proceeding against Venezuela that was originally filed in June 2010 at the World Bank’s International Center for Settlement of Investment Disputes (ICSID). The dispute originated with the expropriation of the airport concession on Margarita Island in Venezuela in 2005. The 3 member ICSID arbitration panel found that Venezuela had to pay a total of US$ 33.7 million for the expropriation, including costs and interest from the 2005 expropriation.  (Latin American Herald Tribune:


Government bonds are again on sale

After having paralyzed the domestic sale of government bonds for 5 months, the Finance Ministry is again putting bonds on the market for a total of  VEB 15.715 billion, in order to pay for debt service, refinancing and fiscal management. More in Spanish: (El Mundo,



Politics and International Affairs


María Corina Machado has been subpoenaed by the Prosecutor General to appear on December 3, to be formally charged with alleged ties with one of the gazillion assassination attempts reported by Nicolás Maduro. The summons was delivered by the SEBIN barely hours after Machado questioned the current and potential Electoral Power for not complying with the Constitution. Machado quickly retorted that she would present herself to the Prosecutor General, and said the charges were being brought because she said the Maduro regime is a dictatorship: "I am being punished for calling things by their name, for saying that there is a dictatorship in Venezuela", she said. She also called for the resignation of four out of five directors of the National Elections Council, and demanded that current Council president Tibisay Lucena and Vice President, Sandra Oblitas, withdraw their nomination for reelection. (Veneconomy,; El Universal,; Reuters,; Bloomberg,; and 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.


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