International
Trade
Cargo that has arrived at Puerto Cabello:
- Over 1,000 tons of milk powder from Argentina for state agency Corporación de Abastecimiento y Servicios Agrícolas (CASA)
- Over 1.200 tons of milk poder and Edam Cheese from Sociedad Anónima Pili and la Cooperativa Nacional de Productores for Industria General de Alimentos Nisa
- Over 540 tons of infant formula
from Nestlé México for Nestle Venezuela.
More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Llegaron-mas-de-2-mil-700-toneladas-de-productos-lacteos-2324800/2015/01/14/484125/)
Oil &
Energy
Maduro meets with Putin as oil-dependent economies
sink, obtains investment promise for Oil belt
President Nicolas Maduro met with Russian leader
Vladimir Putin at the ends of his tour aimed at trying to persuade big oil
producers to cut output to stop the price rout. Venezuelan and Algerian
officials had initiated talks over production levels between Russia and
producers group OPEC, but officials in Moscow have said the country, in which
around 40% of output is in private hands, would find it technically tough to
cut. Russian energy minister Alexander Novak took a similar line on Wednesday,
saying volatile prices were part of market patterns. "Many countries agree that any artificial action to change the situation
on the market is impossible," he said. Moscow has continued to push
crude output to new records, eventually overtaking Saudi Arabia as the top
global producer in the last decade. Russia depends for half its budget revenue
on energy, while Venezuela depends on oil for 96% of its hard currency revenue.
President Maduro was received by Deputy Foreign Minister of the Russian
Federation, Sergey Alexeevich Ryabkov for a meeting at the state residence of
the Russian President outside Moscow. After meeting with Putin, Maduro reported
they had agreed on expanding Russia's investments in the Orinoco oil belt. (Reuters:
http://uk.reuters.com/article/2015/01/14/uk-russia-crisis-oil-venezuela-idUKKBN0KN0K520150114; AVN, http://www.avn.info.ve/contenido/maduro-arrived-moscow-meet-putin;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42397&idc=4;
Reuters, http://www.reuters.com/article/2015/01/15/russia-crisis-oil-venezuela-idUSL6N0UT0P920150115;
Bloomberg, http://www.bloomberg.com/news/2015-01-15/maduro-putin-meet-in-russia-to-talk-oil-prices-funding.html;
El Universal, http://www.eluniversal.com/nacional-y-politica/150115/president-maduro-i-got-the-resources-the-country-requires,
http://www.eluniversal.com/nacional-y-politica/150115/maduro-seeks-long-lasting-consensus-at-opec;
and more in Spanish: AVN; http://www.avn.info.ve/contenido/presidente-maduro-reafirma-compromiso-para-estabilizar-mercado-petrolero-internacional; http:/www.avn.info.ve/contenido/rusia-y-venezuela-fortalecen-alianzas-productivas-para-desarrollo-compartido)
Qatar may fund energy, other projects in Venezuela
Qatar is considering funding projects in Venezuela,
industry and diplomatic sources said, as President Nicolás Maduro lobbies
fellow crude producers to help repair the damage done to its economy by
plummeting oil revenues. Maduro said during a visit to Doha that he was firming
up billions of dollars of financing from Qatari banks. Industry sources in
Qatar said the country was still studying the possibility of investing in
Venezuela's energy, real estate and tourism sectors. "There's
no money being allocated from Qatar yet. We are just in a study phase which can
include building a refinery in Venezuela over two years," said a
source close to the Qatari government. He declined to be named because of the
sensitivity of the issue. (Reuters, http://www.reuters.com/article/2015/01/15/us-venezuela-qatar-idUSKBN0KO17K20150115)
Commodities
Food industries operating here are producing at
maximum capacity, within
availability of raw material and supplies, says the Juvenal Arveláez, CEO of
the Food Industries Chamber (CAVIDEA). He explains that in order to have
regular and permanent supplies it is urgent to put into action a series of
recommendations they have given authorities at all levels for years. (Veneconomy,
http://www.veneconomy.com/site/index.asp?ids=44&idt=42382&idc=3)
“There is food for the
next three to four months,” says the
Vice President for Food Security and Sovereignty Carlos Osorio, adding that food
producing companies have no excuses to not comply with the distribution of
basic products and threatened to take “the actions we have to take within
the law” to guarantee such distribution. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42381&idc=3;
El Universal, http://www.eluniversal.com/economia/150114/food-security-vp-in-venezuela-there-is-plenty-of-everything)
Venezuela is importing 62% of its sugar
consumption, says José Ricardo Álvarez, President of the Cane
Growers Federations. He says the nation consumes 1.2 million tons per year and
the government imported 745,000 tons last year because state agency AGROPATRIA
did not delivery staples and there is a scarcity of spare parts for machinery.
Out of 16 sugar mills operating locally, the 6 private ones account for 80% of
domestic production. More in Spanish:(El Nacional; http://www.el-nacional.com/)
Nine warehouses were seized and will be handed over to the Prosecutor
General’s Office, for allegedly hoarding basic food staples. An arrest warrant
was issued against the company’s owners, announced Vice President Jorge Arreaza
on Wednesday. The Trade Ministry is to immediately distribute all these
products to the public and private networks. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42394&idc=3;
El Universal, http://www.eluniversal.com/economia/150115/venezuelan-vp-announces-seizure-of-warehouses)
Economy
& Finance
Moody's cuts
Venezuela's rating, citing oil prices, increased likelihood of default
Moody's Investors Service has downgraded its
debt rating for Venezuela, citing an increased likelihood of a default due to
lower oil prices. Moody's cut the country's rating to Caa3 from Caa1, with the
outlook stable. "In the event of a
default, Moody's believes that the loss given default (LGD) is likely to be
greater than 50%," the agency said in a statement. The ratings agency
said it believes Venezuela is unlikely to implement forceful policy changes
needed to curb macroeconomic distortions in the market. Venezuela faces key
deadlines for billions of dollars in foreign debt in 2015 and is considered
among one of the most vulnerable oil producers in the 12-member OPEC cartel.
Most analysts estimate a fiscal break-even price of some US$ 110 a barrel. U.S.
oil and Brent futures were trading in the mid-US$ 40s a barrel in early trading
Tuesday. Moody's the long term issuer rating and senior unsecured notes of
Petroleos de Venezuela (PDVSA) to Caa3 from Caa1 and changed the outlook on the
ratings to stable from negative. Moody's also downgraded CITGO Petroleum
Corporation's Corporate Family Rating to B3 from B1; its Probability of Default
rating to B3-PD from B1-PD; and its senior secured ratings on term loans, notes
and industrial revenue bonds to B3 from B1. The rating on CITGO's senior
secured revolving credit facility was downgraded to B2 from B1, reflecting a
lower expected loss in case of default vis-a-vis other classes of debt in the
company's capital structure. The rating outlook for CITGO was changed to stable
from negative. CITGO is PDVSA's wholly-owned US-based refining subsidiary. (CNBC,
http://www.cnbc.com/id/102333082;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2369602&CategoryId=10717)
World Bank estimates that Venezuela's GDP to
drop 2% this year
The
World Bank now estimates Venezuela's economy will drop 2% this year, and says
this country - along with Argentina - is
"currently fighting high
inflation and slow growth". It estimates weaker growth could hurt
other nations, particularly in the case of Venezuela and its PETROCARIBE
program. The Bank reports 2014 GDP contracted by 3%, and says "recent drops in the price of oil have fueled
investor doubt over the possibility that Venezuela can meet its foreign debt
and have pressed US$ bonds up to 26%, the highest in the world." More
in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/banco-mundial-estima-caida-de-la-economia-venezola.aspx#ixzz3On8xc6lG; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/banco-mundial-estima-caida-de-la-economia-venezola.aspx)
Maduro claims he
obtained resources for Venezuela during his tour
President Nicolás Maduro claims he has obtained
resources sufficient for Venezuela to maintain its economy afloat despite oil
low prices. The government has not provided details on agreements reached
during the 10 day tour, but Maduro has said they involve oil, industry, the
food industry and infrastructure. More in Spanish: (El Universal; http://www.eluniversal.com/nacional-y-politica/150116/maduro-dice-que-consiguio-los-recursos-para-el-pais;
El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/maduro--he-conseguido-los-recursos-para-mantener-e.aspx;
El Nacional; http://www.el-nacional.com/)
If there is an "economic war", why there is
shortage of state-made items?
Jorge Roig, president of the Venezuelan
Federation of Chambers of Commerce and Industry (FEDECÁMARAS), dismissed
allegations that lines outside retailers are simply "circumstantial," and claimed that they rather "have to do with the economic model. If you
do the same in any other countries, there will be lines...As long as private
enterprises continue to be persecuted, lines will persist," says Roig.
Shortage of detergent and shampoo is 95%, he reports and wonders that if "there is an economic war, how can you
explain shortage of state-made products? They must be worried if the enemy is
within their ranks." (El Universal, http://www.eluniversal.com/economia/150115/if-there-is-an-economic-war-why-there-is-shortage-of-state-made-items)
SICAD I FOREX auctions have been paralyzed for
3 months, since October 15, 2014. The National Foreign Trade
Center (CENCOEX) has published no further calls since that date, after
providing US$ 4.988 billion in 26 auctions last year. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/subastas-del-sicad-1-se-detuvieron-hace-tres-meses.aspx#ixzz3OywgzNu4)
Bondholders spurning Chavez’s Venezuela disciple
Nicolas Maduro and Rafael Correa are both socialist disciples of the late Venezuela President Hugo Chavez, but only one is managing to
convince bondholders he’s got the ability to weather the collapse in oil
prices. While Chavez’s handpicked successor Maduro is struggling to ward off a
default, Ecuador counterpart Correa is getting a vote of confidence as he cuts
spending and lines up more than US$ 7.5 billion in loans from China. Ecuador’s
benchmark notes due 2024 have gained 1.7% in the past month, compared with a
17% plunge in similar-maturity Venezuelan securities.
Correa, who has long allied himself with Chavez’s socialist ambitions and
declared three days of mourning to mark his death, is now deviating from
policies that saw him use Ecuador’s oil wealth to finance
record spending. (Bloomberg,
http://www.bloomberg.com/news/2015-01-15/bondholders-spurning-chavez-s-venezuela-disciple-andes-credit.html)
Politics and
International Affairs
Capriles calls for united Venezuela opposition as crisis
deepens
Henrique
Capriles has called on Venezuela’s opposition to unite and said he would talk to
other leaders who demanded the resignation of President Nicolas Maduro today
amid a deepening economic crisis. Capriles, the opposition’s presidential
candidate in 2013, asked other leaders to put their differences aside as
shortages of basic goods deepened and prices soared. “We may
not coincide in how to confront the government, but we are in agreement that we
want the country to change and the government to change,” said Capriles,
adding that any change must be done in accordance with the constitution.
Protest plans would be announced shortly, he said. Opposition leaders Maria
Corina Machado, Antonio Ledezma and Leopoldo
Lopez, who remains in jail, sent a joint statement earlier today
saying “the time for change has come.”
The three leaders said a new government was needed to pull Venezuela from the
brink of collapse amid the “incompetencies
and corruption” of the Maduro administration. Ruling party legislator Blanca Eekhout lambasted Capriles
describing him as a "murderer,"
"liar," and a man "without ethics and moral values."
The lawmaker also held Capriles accountable for the wave of violent street
protests taking place in Venezuela in 2014. (Bloomberg, http://www.bloomberg.com/news/2015-01-14/capriles-calls-for-united-venezuela-opposition-as-crisis-deepens.html;
El Universal, http://www.eluniversal.com/nacional-y-politica/150114/capriles-calls-for-perfect-unity-to-tackle-crisis-in-venezuela,
http://www.eluniversal.com/nacional-y-politica/150114/lopez-machado-ledezma-bet-on-political-change-in-2015;
http://www.eluniversal.com/nacional-y-politica/150115/lawmaker-capriles-is-a-murderer-liar-and-has-no-ethics)
Maduro claims that there is an ongoing "economic coup" in Venezuela
President Nicolás Maduro claims that those who wish
for his overthrow are "sabotaging
the economy" as "a part of
plans they devise to try to irritate the people" and upset the
nation's social and political fabric. Venezuela is awaiting his return and the
announced "economic recovery"
plan and a fiscal reform. He says "civic-military
unity" will defeat attempts to destabilize the country. He says his
government has impounded hundreds of tons of scarce basic products in a
warehouse in the West of the nation, and asked that those responsible be jailed
and their assets frozen. He added that he has "precisely instructed" his Cabinet to determine "which economic groups are behind this ambush".
More in Spanish: (Infolatam, http://www.infolatam.com/2015/01/14/maduro-asegura-que-en-venezuela-hay-un-golpe-economico-en-marcha/)
FORBES: The impending collapse of Venezuela
The ratings agency Moody’s downgraded Venezuela to
Caa3, one step above default. This comes as no surprise – markets have been
pricing in the likelihood of default for some time now. Moody’s assessment
assumes that Venezuela’s problem is mainly a balance of payments crisis caused
by a rapidly falling oil price and inadequate foreign reserves. But the reality
is different – and far worse. President Maduro returned empty-handed from his
recent whirlwind global tour: China didn’t want to lend him any money, and oil
producers didn’t want to cut production. However, he does seem to have swung
some sort of financing deal with Qatar to soften the balance of payments
problem. It is all too easy to see where this is headed: Pervasive shortages,
extreme acceleration of inflation, and an obvious foreign exchange gap lead to
capital flight and demonetization of the economy. The budget deficit
deteriorates violently because of a steep decline in tax collection and
increasing subsidy costs. The government attempts to stabilize by cutting
subsidies and by a real depreciation. Real wages fall massively, and politics
become unstable. It becomes clear that the government has lost. The balance of
payments problem is merely the trigger for a massive fiscal, economic and
ultimately political crisis that can only end in one way – the disorderly
collapse of the regime. Whether this will take the form of a revolution, a
military coup or simple chaos remains to be seen. But what we are witnessing is
the destruction of Venezuela’s economy. And that destruction is not,
fundamentally, because of external factors. It is a direct consequence of the
economic policies pursued by the Chavez and Maduro regimes. What will the
future hold for Venezuela? Many fear—and some welcome—a nondemocratic military
intervention. The only path out of Venezuela’s economic mess is through
consensus building that will lead to the economic growth and democratic civil
society enjoyed by many of Venezuela’s neighbors. Default now seems inevitable and
it may be accompanied by hyperinflation when the exchange rate controls fail.
And it will be followed by a wrenching fiscal adjustment, administered by a new
government probably under the aegis of the IMF. The deprivation that awaits the
Venezuelan people is far, far worse than anything they are experiencing at the
moment. (Forbes, http://www.forbes.com/sites/francescoppola/2015/01/13/the-impending-collapse-of-venezuela/)
Night lines banned at shops in some Venezuela states;
scarcity persists
Governors in three Venezuelan states have banned
overnight queuing amid huge and sometimes rowdy lines around shops across the
scarcity-plagued country. Shortages of
basic consumer products from milk to toilet paper have worsened since a lull in
distribution over the Christmas and New Year holidays, prompting many to wait
from the early hours on foot - or in hammocks - before shops open. The
ubiquitous lines and frequent jostling for places when shop doors finally open
are an embarrassment and irritation to Venezuelans across the political
spectrum. There have also been scattered protests and arrests. (Reuters, http://www.reuters.com/article/2015/01/14/venezuela-queues-idUSL1N0UT24Y20150114;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42383&idc=3)
COPEI seeks early parliamentary elections
Roberto Enríquez, President of the COPEI Party, has
asked for early parliamentary elections and says the new National Assembly
should approve a constitutional amendment cutting the President's term of
office short and ban indefinite reelection of presidents. More in Spanish: (El
Universal, http://www.eluniversal.com/nacional-y-politica/150114/copei-propone-adelantar-elecciones-parlamentarias)
Venezuela clashes with Chile over renewed talks
Venezuela's Foreign Ministry rejected statements by
Chilean Foreign Minister Heraldo Muñoz who offered to negotiate a renewed
political dialogue in Venezuela. Venezuela asked Muñoz to "abstain from
giving opinions on internal affairs", and added that the Maduro regime
"has not requested intervention
publicly or diplomatically". The Chilean Foreign Ministry expressed
surprise at the step, and replied that Muñoz's statements are within the March
2014 resolution of the Union of South American Nations (UNASUR) on Venezuela.
More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150114/venezuela-exigio-a-chile-no-opinar-sobre-asuntos-internos; El Nacional; http://www.el-nacional.com/)
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