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, December 5, 2014

December 05, 2014


International Trade

 

Inbound cargo at Puerto Cabello:

  • Over 29,000 tons of wheat from Gavilon Grain for Molinos Venezolanos C.A.
  • Over 29,000 tons of yellow corn for Alimentación Balanceada (Alibal)
  • Over 14,000 tons of wheat from Terra World Trade for Molinos Carabobo
  • Over 3,500 tons of potato seeds
A total of 29 ships are at bay in Puerto Cabello awaiting dock assignment to unload. There are 19 ships bulk cargo, seven of them with soybeans, sugar and rice.


 

Over 26,000 tons of food from Venezuela impounded in Colombia

During a meeting of bi-national military authorities working to reduce contraband, it was reported that 26,000 tons of all types of food were impounded by Colombia in October, and another 52 kilos were captured in November. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/sucesos/mas-de-26-mil-toneladas-de-alimentos-han-sido-rete.aspx#ixzz3L1CcuabT; El Universal, http://www.eluniversal.com/nacional-y-politica/141205/comision-binacional-evaluo-la-lucha-contra-contrabando)

 

 

Logistics & Transport

 

CASA and PDVSA are now US$ 137 million in arrears with shipping lines

Venezuela's Shipping Association (ASONAVIERA) has issued a communiqué saying shippers are worried about delays in payment by PDVSA, CASA and other state agencies for the late return of intermodal equipment. The statement says that "the constant growth of the State as an importer and it's intervention into economic affairs has accumulated US$ 137 million in back debt, not to mention 4,000 pieces of equipment that have not been returned for over 90 days in the country, the location of which is unknown...The amount owed has been growing exponentially and could create a situation similar to that which exist with airlines." More in Spanish: (El Universal, http://www.eluniversal.com/economia/141205/casa-y-pdvsa-deben-137-millones-a-las-empresas-navieras)

 

 

Oil & Energy

 

Maduro says oil prices could fall further

President Nicolas Maduro says oil prices could fall further. "Today it is at US$ 61 ... It had gone up US$ 2 and then it came back down to US$ 61, and it could fall a little more," he said, referring to the country's petroleum export basket, which trades at a discount to other benchmarks because of its heavy oil content. (Reuters, http://www.reuters.com/article/2014/12/04/venezuela-oil-idUSL2N0TO04O20141204)

 

Venezuelan exports of diluted crude oil (DCO) to the United States fell 13% to 163,000 barrels per day (bpd) in November while Venezuela imported crude, naphtha, diesel and gasoline, according to data from Reuters on commercial flows and PDVSA’s internal reports. American harbors received 10 shipments of DCO in November, down from 11 in October when exports resumed after having limited it in earlier months. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42123&idc=4)

 

 

Economy & Finance

 

Venezuela country risk is now above the 2,000 point benchmark, making it the riskiest nation in the world, above Ukraine and Argentina, which are undergoing difficulties in servicing their foreign debt. A report by the Ministry of Economic Affairs, Finance and Public Banking reflects a 46 point jump from the previous session. On the same day, sovereign risk indicators for Venezuela EMBI+ that measure risk percentage points above the US Treasury bills, on the basis of the most traded bonds, was 192 points for Colombia, 248 points for Brazil, 696 points for Argentina, 177 points for Mexico, and 172 points for Peru. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/riesgo-pais-de-venezuela-sobrepaso-la-barrera-de-l.aspx#ixzz3L19cEMRL)

 

Venezuela cuts spending as oil prices plummet

President Nicolás Maduro, struggling with an economic crisis compounded by falling oil prices, has said he authorized a 20% cut in government spending and plans to modify the country’s complicated foreign-exchange system, opening the door to a possible devaluation. The moves could shore up the country’s fragile finances but are also likely to deepen an economic downturn and pose a major political risk to Maduro. The price of Venezuela’s oil, which accounts for 96% of the country’s dollar income, plunged in recent days, falling nearly 7% from Friday to US$ 63.40 as of Tuesday. In a country that was already spending beyond its means for the past several years, the falling oil price stands to worsen the country’s finances. Venezuela’s fiscal deficit—the difference between what it spends and earns—stands at about 17% of annual economic output, a level economists say is unsustainable. “We have a very complicated challenge here,” Maduro told government ministers in a televised address. He said the government only planned to cut “unproductive” expenses and wouldn’t affect social spending. Mr. Maduro said his government is evaluating changes to the foreign exchange system, but didn’t offer details. (The Wall Street Journal, http://online.wsj.com/articles/venezuela-cuts-spending-as-oil-prices-plummet-1417554366)

 

Venezuela sold Dominican Republic oil debt to Goldman Sachs at a 59% loss

Sources report that the Venezuelan government has sold US$ 4.09 billion in oil receivables due by the Dominican Republic for oil sent to them through PETROCARIBE.  The regime sold the Dominican debt to Goldman Sachs at 41% of its value and received only US$ 1.7 billion, according to Miami's El Nuevo Herald. The report says "the sale shows a great deal of despair within state oil company PDVSA. They are selling off their fee assets, trying to get cash flow, cash they do not have." More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

...and Goldman Sachs is reported to be in talks with the Venezuelan government  over Jamaica´s oil debt with PDVSA similar to the one reached over the debt of the Dominican Republic for the oil supplied via PetroCaribe. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42122&idc=4)

 

Central Bank's funding of PDVSA is up 13% in a month

Funding by the Central Bank of Venezuela (BCV) to state-run oil company Petróleos de Venezuela (Pdvsa) soared 13% in a month, official statistics show. BCV data on monetary base shows that by October 24, BCV financial assistance to PDVSA stood at VEB 570.4 billion (US$ 90.53 billion), and then soared to VEB 643 billion (US$ 102.06 billion) by November 21. In January, authorities had said that with the sale of 40% of the shares of PDVSA's gold joint venture to the BCV, liabilities owed by Pdvsa to the BCV would be partially settled, and funding would decline. However, official figures show that requests for resources have continued. Throughout the second half, funding has climbed by 34%.
Economist José Guerra explained that such hike in funding is one of the consequences of the recent slump in oil prices, which has hit oil income.
(El Universal, http://www.eluniversal.com/economia/141204/funding-of-central-bank-to-pdvsa-up-13-in-a-month)

 

Venezuela allows Central Bank to hold reserves in new currencies, diamonds

A reform to Venezuela's central bank law will allow the country to hold international reserves in a broader range of currencies than before as well as in diamonds and precious metals. Reserves can include currency "that is used for accounting and payment of commitments assumed by the Republic," according to the Official Gazette. The change may help the OPEC nation shore up its tumbling international reserves by allowing it to include loans from China that are denominated in renminbi. Finance Minister Rodolfo Marco this week traveled to China to discuss financing deals. (Reuters, http://www.reuters.com/article/2014/12/04/venezuela-cenbank-idUSL2N0TO1FE20141204)

 

Gold Reserve files to enforce US$ 740 million award against Venezuela in USA

Gold Reserve Inc., which won a US$ 740.3 million judgment against Venezuela from the World Bank's International Centre for Settlement of Investment Disputes (ICSID) in Paris in September, has filed a petition to recognize the award in the United States before the US District Court for the District of Columbia. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2363666&CategoryId=10717)

 

 

Politics and International Affairs

 

Maduro's approval rating drops to 24.5% in November

President Nicolas Maduro's approval rating dropped to 24.5% in November, according to a poll by respected local firm DATANALISIS, down 5.7 points from September as economic problems put more pressure on the socialist leader. The obtained by Reuters shows that 85.7% of those surveyed believe the country is heading in the wrong direction. Maduro, who narrowly won the presidency last year in the election triggered by the death of Hugo Chavez, has seen his popularity drop by 26 percentage points since he took office. It is now at an all-time low. Support for state governor Henrique Capriles, who lost the presidential election to Maduro in 2013, rose 3.7 percentage points to 45.8%, the highest of any of the country's opposition leaders. (Reuters; http://www.reuters.com/article/2014/12/02/us-venezuela-politics-idUSKCN0JG29T20141202?irpc=932)

 

Regime indicts Maria Corina Machado

A prominent opposition leader here has been charged with involvement in an alleged plot to assassinate socialist President Nicolas Maduro. Maria Corina Machado, a vocal supporter of anti-government protests that rocked the country earlier this year, rejected the charge as she left the attorney general's office after questioning. "Today they have charged me with the crime of conspiracy," Machado said, flanked by her supporters and the leader of the main opposition coalition, Jesus Torrealba. "All the accusations and supposed evidence are false, and I reject them," she added. The charge carries a maximum of 16 years in prison. Her case will now be assigned to a judge who will formally charge Machado, a former member of the National Assembly, and decide whether she should be detained pending trial. The prosecutor general's office said that she had been charged with "conspiracy" for "allegedly having links to the assassination plan against the president". In May, ruling party leaders made public emails that they claimed showed Machado was plotting against Maduro with others, including the US ambassador to Colombia, Kevin Whitaker. The US government has voiced concern and dismissed the charges against Machado as a ploy to intimidate the opposition. "We are deeply concerned by what appears to be the Venezuelan government's continuing effort to intimidate its political opponents through abuse of the legal process," said State Department spokeswoman Marie Harf. Other opposition leaders rushed to her defense, including Henrique Capriles, the candidate who narrowly lost to Maduro in presidential elections last year. Capriles dismissed the case against Machado as "a little circus put together by Nicolas (Maduro)". (Al Jazeera, http://www.aljazeera.com/news/americas/2014/12/venezuela-indicts-machado-opposition-leader-maduro-201412475638746772.html; Reuters, http://www.reuters.com/article/2014/12/04/us-venezuela-politics-idUSKCN0JH1Z920141204; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42121&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/141204/union-of-latin-american-parties-rejects-charges-against-machado; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2363655&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/141204/us-department-of-state-venezuela-punishes-government-critics; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2363724&CategoryId=10717)

 

Canada's House of Commons seeks freedom of political prisoners in Venezuela

The Canadian House of Commons has passed a resolution asking the government of Venezuela to immediately release Leopoldo López, leader of Voluntad Popular; former San Cristobal Mayor Daniel Ceballos and other political prisoners. The resolution urges the Venezuelan government to obey decisions by the UN Working Group on Arbitrary Detentions, and respect the international treaty on political and civil rights, which Venezuela has signed. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

Venezuela: The most corrupt in Latin America

According to NGO Transparency International’s global ranking of 175 countries, Venezuela ranks 161st, with 19 points (out of a 100), and along with Paraguay, ranking 150th (24/100), are the countries perceived to be the most corrupt in the region. Uruguay and Chile are perceived as the most transparent. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42120&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/141203/venezuela-is-put-among-the-most-corrupt-latam-countries)

 

 

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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