Cargo that has arrived at Puerto Cabello:
- Over 621 tons of vitamin enriched milk from
Argentina for state agency CASA.
Over 512 tons of milk in 19 vans from Nestlé Chile for its Venezuelan affiliate.
- Over 452 tons of cheese, skim milk and powdered buttermilk from Uruguay for Productos Lácteos Flor de Aragua, Zuly Milk S.A. and General de Alimentos Nisa.
Basic inputs to pay no import duties
Changes to the Customs Law establish that items classified as primary need and those that are in the basic need basket shall be exempted from import duties "whenever there is scarcity due to lack of domestic production or insufficient production". More in Spanish: (El Universal; http://www.eluniversal.com/economia/141208/exoneraran-de-pagos-en-aduanas-a-insumos-basicos)
New rules to simplify customs procedures
Recent changes to the Customs law have also created the role of a special economic operator that can benefit from simplified commodity control and dispatching. In addition to customs agents, carriers, warehousing, couriers and port operators, Customs may now designate any importer as a special operator so that they can benefit from any special import or export benefits. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/nueva-ley-simplifica-tramites-aduanales.aspx#ixzz3LOZQJtX7)
Imports from the US up 24.6% in October
Venezuelan imports from the US rose to US$ 1.270 billion in October, the highest in 2014, according to the US Department of Commerce. The main items are products for refining (US$ 336.4 million), chemicals (US$ 169.2 million), machinery (US$ 163.6 million) and computing and electronic equipment (US$ 98.8 million). (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/importaciones-desde-eeuu-subieron-24-6--en-octubre.aspx#ixzz3LIgCtKCg)
Logistics & Transport
CONFERRY suspended its La Guaira-Margarita ferry
The Ministry of Aquatic and Air Transport reports the route La Guaira-Punta de Piedras serviced by state-run CONFERRY will not be operating during the Christmas Season. This measure worsens the transport problem to the island which could cause a loss of up to 30% in reservations, according to CONSETURISMO head Ricardo Cusanno. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42170&idc=3)
Oil & Energy
PETROCARIBE member countries prepare for an end to cheap oil
Several Central American and Caribbean countries are preparing for a cutback in cheap oil shipments from Venezuela as this country deals with a drop in oil prices and a worsening economic crisis. For the past decade 13 beneficiaries of Venezuelan largesse have become highly dependent on its oil to pay for social programs and infrastructure, and in turn have supported Venezuela internationally. Although Venezuela vows it will continue supporting the program, its oil exports to these nations dropped 20% January to October 2014 from 2013, according to ClipperData. The International Monetary Fund has reported that 2013 crude oil shipments had already dropped 15% from 2012 levels. Several member nations are preparing for greater cuts, according to diplomatic sources. The IMF is warning regional governments that "today the probability of disruption is higher since Venezuela is under greater pressure", according to Adrienne Cheasty, IMF Assistant Manager for the Western Hemisphere. Honduras and Guatemala are no longer part of the program since Caracas made conditions tougher. Countries outside the program have also seen cuts: Bolivia and Paraguay received no crude shipments at a discount, and Argentina's quota has been cut by half, according to PDVSA data. Highly dependent nations, such as Haiti, would face the worst difficulties. For many years the PETROCARIBE was mutually beneficial: Member nations paid only a fraction of the oil market price up front and delayed repayment for up to 25 years at interest rates as low as 1%. The program has cost Venezuela some US$ 22.1 billion, and in exchange enlisted the support of these countries at the UN, the OAS and other organizations. But now a PETROCARIBE member ambassador in Caracas says: "There is an agreement among us that we do not want to be too dependent on one source....we don't want to put all of our eggs in one basket". More in Spanish: (Latinoamérica Informa, http://latinoamericainforma.com/los-paises-de-petrocaribe-se-preparan-para-el-fin-del-petroleo-venezolano-barato/)
U.S. refining surge fills tankers taking fuels to Latin America
The U.S. refining surge is lifting tanker rates to the highest in at least three years as demand accelerates for vessels carrying the processed fuels to buyers in Latin America and the Caribbean. Tankers shipping about 38,000 metric tons of refined fuels to Rio de Janeiro from Houston earned an average of US$ 31,050 a day last week, according to data from Clarkson Plc. That’s the highest since at least December 2010, when the world’s largest shipbroker began publishing the data. Traders booked 29 fuel shipments to Latin America and the Caribbean on medium range tankers last week, an all-time high, according to Weber. Fixtures to Venezuela rose “aggressively” owing to extensions to refinery halts which began last month, it said. (Bloomberg, http://www.bloomberg.com/news/2014-12-08/u-s-refining-surge-fills-tankers-taking-fuels-to-latin-america.html)
2015 first quarter now looms difficult to low inventories
Ismael Pérez Vigil, Executive President of the National Council of Industries (CONINDUSTRIA) says the first quarter of 2015 looms as difficult due to low inventory levels, a lack of foreign exchange and lengthy vacations companies have been forced to implement because they have no supplies for production. More in Spanish: (Notitarde, http://www.notitarde.com/Economia/Primer-trimestre-2015-luce-complicado-por-bajos-niveles-de-inventarios-2300907/2014/12/08/430559/)
Brazilian pharmaceutical EUROFARMA is considering investing in medicine production in Venezuela, particularly in generics, cancer medicines and antibiotics. Some of the company’s representatives met with Health and Trade ministers Nancy Pérez and Isabel Delgado, and Brazil’s Ambassador to Venezuela Ruy Pereira to adjust the stated agreements. A second meeting is scheduled for next week. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42171&idc=3)
Economy & Finance
Maduro says Venezuelan oil is down to US$ 60.55 per barrel, rails against international credit agencies
President Nicolás Maduro announced that the price of Venezuelan oil is now down to US$ 60.55 per barrel, and railed against credit agencies for making Venezuela pay 35% interest on credits by rating it as the "worst country risk in the world". He says Venezuela is undergoing an economic blockade, and that the black market dollar "does not exist" within Venezuela's economic reality and it is being "imposed as an instrument of financial, monetary, psychological and political warfare". He says his regime is "fully optimizing and planning its foreign exchange budget for 2015." Maduro also announced he will launch a "powerful" socialist offensive from the start of 2015 against "economic warfare by stateless oligarchs against the nation...and will make a a revolution within the revolution...on all political fronts". More in Spanish: (El Universal, http://www.eluniversal.com/economia/141208/maduro-hoy-llego-a-6055-dolares-el-barril-de-petroleo-venezolano)
Venezuela, into the abyss
Oil prices are flirting with yet another five-year low, and few countries are as fundamentally threatened as Venezuela, where the sudden collapse in crude prices is making a dire economy downright dismal. Global benchmark prices have now shed 40% since their June highs. For a country like Venezuela, which is dependent on oil for nearly all of its export earnings, the threat is becoming more urgent by the day. Last week, Venezuela’s government announced a 20 % spending cut. While President Nicolas Maduro vowed that the cuts won’t affect the country’s cherished social spending–a key to maintaining what little popular support the successor to Hugo Chavez still enjoys–it’s clear that Venezuela’s inability to drum up fresh sources of revenue is tearing at the sinews of an economy that was already reeling from rampant inflation, consumer shortages, and widespread (if underreported) unemployment. Complicating everything is the country’s byzantine currency exchange rate, which officially values the local currency, the bolivar, at huge multiples of the black-market exchange rate, despite stealth devaluations over the past year. That means that even Venezuela’s oil earnings tend to evaporate when they are converted into artificially inflated local coin. Although the country has vowed to repay its debt, traders are dumping Venezuela’s sovereign bonds and there are signs that the market is increasingly pricing in the possibility of a default. Venezuelan bonds are trading at 50 cents on the dollar and offering sky-high yields, while bond traders are preparing to cover themselves–with debt swaps–in the event that Caracas follows the path of other troubled Latin American countries such as Argentina. (Foreign Policy, http://foreignpolicy.com/2014/12/08/venezuela-into-the-abyss-maduro-oil-prices-pdvsa/)
Capriles forecasts a "new disguised devaluation"
Miranda Governor and opposition leader Henrique Capriles says President Maduro is getting ready to decree a "new disguised devaluation...it will apply a dual exchange system in 2015...that is a new devaluation...and will probably do away with the minimum official rate of VEB 6.30/US$1". (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/capriles-preve--una-nueva-devaluacion-disfrazada-.aspx#ixzz3LIgfuAwp; El Universal, http://www.eluniversal.com/nacional-y-politica/141208/gobernador-de-miranda-importaciones-estan-afectando-a-venezolanos)
Politics and International Affairs
Venezuela braces for a tough 2015
Venezuela's increasingly desperate economic circumstances are affecting the government's popularity: As public finances dry up, so does support for the ruling party. In 2015, President Nicolas Maduro and the United Socialist Party of Venezuela will struggle — and possibly fail — to maintain stability. It is clear that neither Maduro nor the United Socialist Party of Venezuela retain the political support or oil revenue to guarantee stable rule. The upcoming year will be especially problematic for Caracas because Maduro will face ongoing economic problems as well as a legislative election in 2015, tainted by increasing public dissatisfaction with his performance. The government's current strategy of avoiding potentially controversial economic reforms while maintaining high deficit spending is untenable and likely to prompt steps toward increasing Venezuela's public cash flow next year. However, time is not on Maduro's side. Logical attempts to mitigate the crisis, such as increasing the price of gasoline, slashing public spending or sharply devaluing the bolívar, will undermine the popular support underpinning the United Socialist Party of Venezuela's rule. With voters steadily abandoning the ruling party, political challengers will continue to emerge throughout the coming year from factions within the PSUV and the opposition coalition MUD. Next year will be crucial for the Venezuelan government's future. Even without controversial government actions, ongoing economic problems make another outbreak of protests likely in 2015. (Stratfor, http://www.stratfor.com/sample/analysis/venezuela-braces-tough-2015)
Crackdown weakens divided Venezuela opposition as election looms
Maduro’s government, the most unpopular in at least 15 years, is squeezing its opponents as it tries to tighten its grip on power before congressional elections scheduled for next year, said Diego Moya-Ocampos, an analyst at political risk consultancy IHS Inc. A victory by the opposition in the vote could pave the way for a plebiscite in 2016 on whether Maduro should resign. “Maduro’s use of state institutions to go after political opponents hasn’t been seen in Venezuela since the fall of the last dictatorship in the late 1950s,” says Moya-Ocampos. “This level of repression is unprecedented in the country’s recent history.” And it’s working, according to David Smilde, senior fellow at the Washington Office on Latin America. Internal divisions are preventing the opposition from presenting a coherent economic plan to the voters, while repression is diminishing its capacity to campaign ahead of the vote, he said. “The government has criminalized the protests, limiting what the opposition movement can do on the streets,” Smilde said. “As an organized force, the opposition will enter this electoral year weaker than the previous one.” There are now three groups within the alliance jostling for positions in the next government, Moya-Ocampos said. But the scale of the problems facing the country will force the opposition to put aside differences as the elections get closer, says Luis Vicente Leon of the DATANALISIS polling firm. “The opposition has never reached a consensus around radical events such as protests, but has historically rallied around elections.” (Bloomberg, http://www.bloomberg.com/news/2014-12-09/crackdown-weakens-divided-venezuela-opposition-as-election-looms.html)
US Senate approves Venezuela sanctions bill
The United States Senate has approved a bill which would impose sanctions on Venezuelan officials found to have violated protesters' rights. The Venezuela Defense of Human Rights and Civil Society Act targets current and former Venezuelan officials who directed "significant acts of violence or serious human rights abuses against persons associated with the anti-government protests in Venezuela that began on 4 February". The United Nations condemned "all violence by all sides in Venezuela" and called on the government "to ensure that people are not penalized for exercising their rights to peaceful assembly and to freedom of expression". The government said opposition leaders had incited protesters to violence and had been planning a coup against the government of President Nicolas Maduro. At the height of the protests in February, opposition leader Leopoldo Lopez was arrested, and has been charged with inciting violence. And last week, Venezuela's chief prosecutor launched an investigation into leading opposition politician Maria Corina Machado over an alleged plot to assassinate President Maduro. If the bill is passed, Venezuelan officials deemed to have violated the rights of protesters could be denied visas to the US and see their assets frozen. Previously, the US government opposed sanctions, arguing they would interfere with negotiation efforts between the Venezuelan government and the opposition. But last month, US Deputy National Security Advisor Tony Blinken told a Senate foreign relations committee hearing, "We would not oppose moving forward with additional sanctions." The bill will now go to the House of Representatives. If it is passed, it will still have to be signed by President Obama. (BBC News, http://www.bbc.com/news/world-latin-america-30393198)
Maduro "reviews" relations with the US
President Nicolás Maduro has announced he will "review" relations with the US, claiming he has information the American Embassy in Caracas has undertaken actions which he says "are beginning to be intolerable" against domestic stability. State Department spokesperson Jen Psaki quickly retorted that the US will continue to speak out "against the lack of respect for human rights and democracy in Venezuela." Psaki says "our embassy operates within the limits of the Vienna Convention on diplomatic relations." More in Spanish: (El Nacional; http://www.el-nacional.com/; and Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/venezuela-revisa-relaciones-estados-unidos)
Maduro will not attend the Ibero-American Summit in Veracruz
President Nicolás Maduro will not attend the XXIVth Ibero-American Summit in Veracruz (México), according to official sources. He has never attended one of these meetings as head of state. Foreign Minister Rafael Ramírez will not attend either, and instead will attend a meeting on climate change in Peru. More in Spanish: (El Nacional, http://www.el-nacional.com/mundo/Maduro-asistira-Cumbre-Iberoamericana-Veracruz_0_533946709.html)
Inter-Parliamentary Union to follow up prosecution against Machado
The Inter-Parliamentary Union (IPU) plans to send an observer to Venezuela to follow-up on proceedings against deposed opposition deputy María Corína Machado, who was charged by the Prosecutor General with scheming the assassination of President Nicolás Maduro, says Roger Huizenga, Secretary of the Human Rights Committee of the IPU.
Huizenga explained that the observer will brief the Committee and the member parliaments of the organization on the development of the legal action against Machado, and whether her court rights were observed. (El Universal, http://www.eluniversal.com/nacional-y-politica/141208/inter-parliamentary-union-to-follow-up-prosecution-against-machado)
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.