January 20, 2015

International Trade

 

Cargo that has arrived at Puerto Cabello:

• Over 1764 tons of milk in 60 containers from Fonterra Limited for state agency CASA.
• Over 793 of liquid milk in 32 containers from CENTROLAC, for CASA.
• Over 424 tons of powdered milk from Nestlé Argentina for its Venezuela subsidiary
• Over 283 tons of infant milk formula in 12 vans
• Over 400 tons of chicken and beef
• 223 tons of coffee for Café Venezuela.

More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-tres-mil-toneladas-de-alimentos-llegaron-al-puerto-local-2328039/2015/01/19/485886/)

 

 

Oil & Energy

 

Venezuelan oil falls below US$ 40 a barrel

The average price of Venezuela’s crude basket fell US$ 3.25 this week to US$ 39.19, continuing the downward trend that led President Nicolas Maduro to visit petroleum-producing countries and lobby for his plan to reverse the decline.
“Crude prices this week continued to fall due to the outlook for a slowdown in global demand and signs of abundant supply of crude in the main consumer centers,” Venezuela’s Oil and Mining Ministry said Friday in its weekly report.
Venezuela, a founding member of OPEC, has seen its crude basket fall sharply in recent weeks from an average price of US$ 90.19 on Sept. 12. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2369827&CategoryId=10717)

 

Foreign Affairs Minister Delcy Rodríguez met with Kuwait’s Oil Minister Al Omair to assess strategies to stabilize oil prices. She also met with Saudi Arabia’s Oil Minister Al Naimi. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42422&idc=4; El Universal, http://www.eluniversal.com/economia/150119/venezuela-kuwait-assess-strategies-to-increase-oil-prices)

 

Harvest seeks arbitration against Venezuela after failed sales

Harvest Natural Resources Inc, a Texas based oil and gas company, says it has filed an arbitration request against Venezuela before a World Bank tribunal to protect the value of its investment here. The request filed with the International Center for Settlement of Investment Disputes (ICSID) is seen as a last resort for the Houston-based company. (Reuters, http://www.reuters.com/article/2015/01/16/harvestnatural-venezuela-arbitration-idUSL1N0UV19F20150116)

 

 

Commodities

 

Regime to summon food distributors and wholesalers to give them an ultimatum and make them sign a commitment to have their products reach the population, according to President Nicolás Maduro in his first statements after returning from his failed tour. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42417&idc=3)

 

Venezuela auto production plunged 72.5% in 2014

Vehicle production in recession-hit Venezuela fell 72.5 percent last year to a paltry 19,759 units, national automakers organization CAVENEZ said on Saturday, the worst performance on record. Like other private businesses in Venezuela, carmakers have said the socialist government's currency controls have stopped them from importing essential components due to restrictions and delays in purchases of dollars. Sales of new cars fell 76% from 2013 to just 23,707 units, Cavenez added in a report. (Reuters, http://www.reuters.com/article/2015/01/17/venezuela-autos-idUSL1N0UW0GB20150117; El Universal, http://www.eluniversal.com/economia/150119/car-assembly-in-2014-down-50-versus-2003)

 

Government launches TV spot asking public to stop "nervous buying"

Venezuela's socialist government has launched a 30 second spot on state TV asking citizens to cut down on "nervous buying" and accusing them of sparking scarcity. Upon returning from his global tour, President Maduro said that 18 million people took to the supermarkets during 4 days last week "three times as in any other time", and that sales those days were equal to those made in a normal month and a half.  More in Spanish: (Infolatam, http://www.infolatam.com/2015/01/18/gobierno-venezolano-pide-frenar-las-compras-nerviosas-en-spot-televisivo)

 

 

Economy & Finance

 

Maduro's annual address to the Congress postponed

The session was originally scheduled for today and was postponed to tomorrow, January 21st. There have been no explanations about the suspension. President Nicolás Maduro said last week that besides his annual message about the main economic, social, political, and managing aspects in 2014 he would announce some economic moves. The reason for the change was not disclosed. (El Universal,: http://english.eluniversal.com/nacional-y-politica/150119/maduros-annual-address-to-the-congress-postponed-for-wednesday)

 

Business leaders willing to meet with government

Jorge Roig, president of Venezuela's main business federation (FEDECÁMARAS) says he is willing to meet with the government "as many times as necessary to solve the nations' many problems". He added "the political system is responsible for the long lines because it favors state controls, price controls and the persecution of private enterprise". Venezuela's Executive Vice President Jorge Arreaza has called on domestic and foreign investors to establish joint agreements to promote "bolivarian socialism". More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/fedecamaras-reitera-disposicion-de-reunirse-con-el.aspx#ixzz3PMEzNC30; AVN; http://www.avn.info.ve/contenido/gobierno-llama-empresarios-establecer-alianzas-para-impulsar-capacidad-productiva-del-país; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/zonas-economicas-refuerzan-estimulos-a-la-inversio.aspx)

 

 

Politics and International Affairs

 

Maduro tries to buy more time

Maduro needs more resources to govern his country effectively. The government does not have enough money to maintain public spending or distribute to the public ahead of the December legislative elections. Without additional funding, the Venezuelan government will probably have to implement some difficult and unpopular economic measures to redress its food shortages. Those measures, which include devaluing the bolivar, cutting shipments of oil abroad through PETROCARIBE and increasing the price of fuel, come with political consequences. They would accelerate inflation and cost the government whatever approval it still has. Maduro likely will forestall making his decision for as long as he can, but continued low oil revenue could force his hand.  The Venezuelan public could well disrupt his plan to wait out a decision. Long lines for food and basic consumer goods have led to protests in Caracas and in the states of Tachira, Zulia and Merida. So far, the few who have protested appear to have done so out of genuine angst, not at the behest of the political opposition. But if the shortages persist, pockets of dissatisfied citizens could grow into something more profound, particularly if Maduro fails to secure additional funding and the price of oil stays low. Potential action against Maduro by internal rivals is also a plausible risk for the president. Rumors circulating in Caracas since the beginning of the year suggest that unidentified political factions within the government plan to remove Maduro from power. In the coming months, the situation in Venezuela will remain fluid. The government will proceed cautiously so that it can maintain its popularity ahead of the legislative elections, but any measures it takes in the interim are highly unlikely to turn around the country's failing economy. With no recourse available to Maduro, the Venezuelan economy will continue to falter, as will the public's faith in its leaders. (Stratfor, http://www.stratfor.com/analysis/venezuela-maduro-tries-buy-more-time)

 

Street protests loom as shortages, inflation and oil slump hit Venezuela

Even Venezuela’s most conciliatory opposition leader has had enough. Henrique Capriles said this week that the time was ripe to try to force a change. “We are in a state of emergency,” he says. “This is the time to mobilize in the streets.” The call to protest was significant because Capriles, a state governor, disavowed last year’s violent protests demanding the resignation of Nicolás Maduro, Venezuela’s president. Instead, Capriles had advocated regime change through the ballot box. But the situation on the ground has changed since then. According to the latest opinion poll, Maduro enjoys the support of just 22% of the population, and he has come under fire on social media and editorial pages for spending nearly two weeks outside the country – with his extended family in tow – while the crisis deepens. Capriles, who narrowly lost the presidency to Maduro in 2013, met with other opposition leaders throughout the week to define their protest strategy. But in the western city of San Cristóbal, the flashpoint of last year’s protests, a small group of students have already begun to set up roadblocks and burn tires, according to Reuters. Flashes of protest at supermarkets in Caracas have landed a handful of people in jail. (The Guardian, http://www.theguardian.com/world/2015/jan/16/venezuela-struggle-streets-inflation-shortages-oil-slump?utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief1.19; El Universal, http://www.eluniversal.com/nacional-y-politica/150119/capriles-the-people-have-to-show-their-discontent)

 

Opposition coalition MUD convenes "demonstration of empty pots"

Opposition coalition Unified Democratic Panel (MUD) convened the Venezuelan people to stage a "demonstration of empty pots against hunger and for change" in Caracas on January 24, in order to express "peacefully and forcefully" their outrage for shortages, long lines to buy essential goods, insecurity, and repression. In addition, in a communiqué, the MUD also called on people to honk their horns and bang pots during President Nicolás Maduro's speech, now scheduled for Wednesday at the National Assembly, "to show rejection of the president's insults and threats against his own party members, the opposition and workers and businesspersons upon his return from his recent and expensive international tour." (El Universal, http://www.eluniversal.com/nacional-y-politica/150119/opposition-coalition-mud-convenes-demonstration-of-empty-pots)

 

NGO records 9,286 protests in Venezuela in 2014, 52% of them against the government

In its latest report, non-governmental organization Observatorio Venezolano de conflictividad Social (Venezuelan Observatory of Social Conflict, OVCS) says that 9,286 protests took place in Venezuela in 2014, that is, 26 protests daily. The research showed a hike in Venezuela's peaceful protests, marking a record high in the contemporary history of the nation. "Venezuelans took the streets in 2014 peacefully demanding their rights, yet the State responded with systematic political repression and criminalization, which resulted in a large number of people injured, dead, and political prisoners. We are concerned about the increase of impunity and human rights violations in Venezuela." Marco Antonio Ponce, OVCS general coordinator, said. 52% (4.833) of the protests were against the regime headed by President Nicolás Maduro; 15.23 % were about labor conditions; 14.69% about housing and basic services; 10.45% about crime and lack of legal defense; 5.17% over scarcities; and 2.37% about education. Protests increased by 111% from 2013. (El Universal, http://www.eluniversal.com/nacional-y-politica/150119/ngo-records-9286-protests-in-venezuela-in-2014; and more in Spanish: El Nacional; http://www.el-nacional.com/)

 

Fast track sentencing

Leopoldo López’ trial will continue without him after he decided not to attend any more hearings until a court of Appeals rules on the request of the UN’s Group on Arbitrary Detentions to release him. Judge Susana Barrientos responded by continuing the trial against López and four students on trumped-up charges of violence against the Attorney General’s Office almost a year ago without him. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42421&idc=1)

 

Venezuelan Francisco Illaramendi’s sentence in a massive fraud case in a US court is scheduled for the end of January. In a request for mercy sent to the judge last week, Illaramendi claimed he was used “as a pawn” by corrupt officials of the Venezuelan government to cover up investment losses. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42418&idc=2)

 

Spanish left-wing leader avoids commenting on "Chávismo"

Pablo Iglesias, Spain's left-wing leader of PODEMOS party avoided making any comments about "Chávismo" in a recent interview. "The good thing is that anything happening in Venezuela will be decided by its citizens through their votes. The Spanish are not concerned about the exhaustion of Chávismo, yet some people want to talk about it to avoid from talking about Spain," Iglesias replied when queried if the movement created by (late) Venezuelan President Hugo Chávez had come to an end. (El Universal, http://www.eluniversal.com/nacional-y-politica/150119/spanish-left-wing-leader-avoids-delving-into-chavezism)

 

Venezuela to open an embassy in Kazakhstan

Venezuela will formalize diplomatic relations with former Soviet nation Kazakhstan by opening an embassy in that country. The decision was announced by Venezuelan Foreign Minister, Delcy Rodríguez, during her visit to that nation, in the context of a tour aimed at getting international funding to contain the current decline in oil prices.
Kazakhstan is rich in oil, gas, and uranium and its President, Nursultan Äbishuly Nazarbayev, is a former communist who has amended the Constitution several times to remain in office through elections. (El Universal, http://www.eluniversal.com/nacional-y-politica/150119/venezuela-to-open-an-embassy-in-kazakhstan)

 

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.