International
Trade
Cargo that has arrived at Puerto Cabello
- 32,749 tons of rice from Louisiana, for state
agency CASA.
- 33,000 tons of corn from Argentina, also for
state agency CASA.
- Over 32,000 tons of paddy rice from TRC Trading
Corporation for CASA
- 3,800 tons in 161 containers bearing milk,
coffee, beef and cooking oil from Caribbean Liquid Sugar RHJ, Centrolac,
Colmenitas S.A., Eskimo S.A., Productos Lácteos La Perfecta, Alba
Alimentos de Nicaragua, and Comercial San Martín, for Casa & Café
Venezuela.
- Over 669 tons of doors and bathrooms from Postar
for Servicio Fondo Nacional del Poder Popular (Safonapp).
- Over 150 tons of baby formula milk from México to
Nestlé Venezuela.
- Also vehicle parts, and personal care prodcts
from Ford Motor and Procter & Gamble for their local affiliates.
SIMADI FOREX rate is being used for customs clearances
Cipriana Ramos, President of the Customs and Port
Affairs Committee of the National Trade and Services Council (CONSECOMERCIO)
says "implementation of the new
foreign exchange system in customs is a mess," since the customs
clearance fee is being charged at the SIMADI foreign exchange rate of VEB 172/US$1,
even when it had been announced that it would be charged at the foreign
exchange rate traded at the Ancillary Foreign Currency Administration System (SICAD),
currently standing at VEB 12/US$1. "It
is not on paper, but that is what is happening at customs," she
claimed. (El
Universal, http://www.eluniversal.com/economia/150226/simadi-forex-rate-used-for-customs-clearance-in-venezuela; More in
Spanish: El Universal; http://www.eluniversal.com/economia/150226/advierten-aplicacion-de-tasa-simadi-en-nacionalizaciones;
El Nacional; http://www.el-nacional.com/)
Oil &
Energy
Venezuela seeks annulment of Exxon award at World Bank
tribunal
Venezuela has requested the annulment of a World Bank
tribunal award that orders it pay Exxon Mobil Corp US$ 1.6 billion in
compensation for nationalizations, both sides said on Wednesday. George Kahale,
Venezuela's lawyer, said he did not know when the tribunal was likely to issue
a decision on the request. "The
first step is for the appointment of the committee to hear the annulment
application, and that has not happened yet," said the lawyer with
Curtis, Mallet-Prevost, Colt & Mosle LLP. "The schedule for the annulment process will not be determined until
after the committee is appointed." (Reuters, http://www.reuters.com/article/2015/02/26/venezuela-exxon-mobil-idUSL1N0W007320150226; El
Universal, http://www.eluniversal.com/economia/150226/venezuela-seeks-reversal-of-icsid-decision-on-exxon-mobil-case)
Foreign oil companies authorized to sell their FOREX
A dozen foreign oil companies operating jointly with
PDVSA are now able to exchange their FOREX at the highest legal rate in use
here through the new SIMADI system, at around VEB 172/US1. The step is meant as
an incentive to improve the bolivar budget of these companies seeking to
increase oil production in Venezuela. More in Spanish: (Panorama, http://panorama.com.ve/portal/app/push/noticia140684.php; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/reuters--autorizan-a-petroleras-extranjeras-a-camb.aspx)
Venezuela and Trinidad to seek joint gas exploration, jointly with international
firms in the border areas. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/venezuela-y-trinidad-pactan-explotar-reservas-de-g.aspx#ixzz3SqUicm54)
Saudi Arabia says demand for crude oil growing, prices
stabilizing
Saudi Arabia´s Oil Minister Ali al-Naimi says demand for crude oil is growing and
markets are quiet. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/industria/demanda-de-crudo-crece-y-precios-se-estabilizan--a.aspx#ixzz3SqV18XyC)
Union leader reports Venezuela's 146,000 bpd El Palito
refinery down
State oil company PDVSA's 146,000-barrel-per-day El
Palito refinery has been halted since Monday due to problems with a compressor
and a demineralization plant, union leader Ivan Freites said on Wednesday. "It's completely down," said
Freites, adding there was no indication of when the refinery would restart. Amuay,
the OPEC country's biggest refinery, is operating at 370,000 bpd, well below
its 645,000-bpd capacity, because its flexicoker and a crude distillation unit
remain out of service, Freites added. Cardon, which along with Amuay makes up
the major Paraguana refining complex, is operating at about a third of its
total 310,000-bpd capacity, according to workers and Freites. (Reuters, http://www.reuters.com/article/2015/02/26/venezuela-oil-refinery-idUSL1N0VZ28N20150226)
Commodities
Toilet paper-for-Venezuelan oil swap offered by
Trinidad
Venezuela, plagued with shortages of basic goods, was
offered a reprieve by the Prime Minister of neighboring Trinidad & Tobago:
exchange oil for tissue paper. Prime Minister Kamla Persad-Bissessar suggested
an oil-for-tissue swap in a news conference Tuesday following a meeting in Port
of Spain with Venezuelan President Nicolas Maduro. She said the deal would
benefit both countries. “The concept of
commodity sharing is simple -– the Government of Trinidad and Tobago will
purchase goods identified by the Government of Venezuela from T&T’s
manufacturers, such as tissue paper, gasoline, and parts for machinery,”
Persad-Bissessar said. (Bloomberg, http://www.bloomberg.com/news/articles/2015-02-25/tissue-paper-for-venezuelan-oil-swap-offered-by-trinidad)
There is no sugar because eight out of the 10 sugar
mills in government hands are not
operational, according to José Ricardo Álvarez, head of Venezuela’s Federation
of Sugar Cane Producers’ Associations. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42924&idc=3)
Economy
& Finance
New SIMADI FOREX system considered insufficient,
government in "ideological
straightjacket"
DATANALISIS President Luis Vicente León says the new
SIMADI FOREX system is being operated with controls and a free market cannot
operate that way. "The idea is that
the market should set the price, not that the Central Bank will impose it; the
exchange market is not open. If a company wants to sell at 180 it cannot, the
Central Bank rejects the transaction because it is not the set price".
Economists Ricardo Villasmil and Pedro Palma say "the government knows it should make economic sense, but it does not
have it because it is trapped by its own ideological straightjacket".
Palma says Venezuela is headed "toward
an explosion", and that will "inevitably
bring about the changes the country needs". More in Spanish:
(Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/leon-simadi-podria-ser-un-sistema-disfuncional-si-.aspx#ixzz3SkjVuwQs; El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/economia/150227/analistas-preven-mayores-niveles-de-escasez-e-inflacion)
Maduro crackdown raises risks for foreign companies
President Nicolas Maduro’s increasing pressure on his
political opponents amid a crumbling economy is a warning to the governments of
foreign investors operating here. Citing an “endless coup” against his two-year-old government, and amid
shortages of basic goods, he has accused companies of fomenting an “economic war,” ordering the arrests this
month of executives of the country’s biggest pharmacy retailer and taking
control of a supermarket chain. “What the
Venezuelan government has clearly transmitted to the world it that is willing
to take extreme measures,” said Elsa Cardozo, a professor of international
relations at the Central University of Venezuela. “How far will this go? It depends how desperate Maduro is facing the
internal crisis in Venezuela, which is very grave.” Maduro is seeking to
deflect criticism of his government as the economy heads toward a 7%
contraction, according to the International Monetary Fund, and his party faces
legislative elections. The country’s 69% inflation rate is the highest in the
world. “Maduro will likely continue to
crack down on the opposition and the private sector as he looks to blame
scapegoats for the country’s growing problems,” says Risa Grais-Targow, an
analyst at consulting company Eurasia Group. (Bloomberg, http://www.bloomberg.com/news/articles/2015-02-24/venezuela-crackdown-raises-risks-for-foreign-companies)
Venezuela still seen defaulting in 2015 by Deutsche
Bank
Deutsche Bank AG and Jefferies LLC still see Venezuela
running out of money to pay debt in 2015. They’re the only ones out of 10 firms
surveyed by Bloomberg, which included Goldman Sachs Group Inc. and Credit
Suisse Group AG. While the country has raised almost US$ 5 billion in the past
month and oil has jumped 21% from an
almost six-year low, Deutsche Bank’s Armando Armenta says that’s still not
enough. Venezuela needs US$ 32 billion to finance itself this year, according
to his estimates. “The financing gap that
they are facing for this year with current oil prices is just too large...I
don’t see a path out in which they can avert default.” Venezuela, which
relies on crude for more than 95% of exports, and its state oil company have about
US$ 10 billion of debt due this year, according to Armenta. That’s equal to 43%
of the country’s US$ 23 billion in foreign reserves. The nation will also need
about US$ 40 billion to import everything from milk to toothbrushes, according
to Armenta’s estimates. Venezuela’s latest measure to ease a shortage of hard
currency will also prove insufficient, says Deutsche’s Armenta. “All these measures they might announce or
might not announce in coming months, even though they would’ve helped a few
months ago, would not be enough during this year,” Armenta said. “Some sort of external financing for the
economy is needed. I don’t know what could be a source.” (Bloomberg, http://www.bloomberg.com/news/articles/2015-02-24/venezuela-still-seen-defaulting-to-deutsche-bank-andes-credit)
How long will China prop up Venezuela?
China has poured some US$ 100 billion into Latin
America and the Caribbean through loans and infrastructure projects. Cui
Shoujun, of Beijing's Renmin University, says all is part of a long term
strategy to establish global multilateral alliances and "reconstruct the world order".
"The short term benefits or losses
are secondary", he says. But Chinese loans to Venezuela are over US$
45 billion, including a US$ 10 billion credit backed up by future oil supply.
Venezuela will this be a Litmus test for China in the area. China is already
sending out signals that there are limits to its generosity and the pace of
financing has slowed down from 50% annually (2009-2011) to 10% in 2014, and
that tied to specific projects. There are about US$ 150 billion investment
projects currently signed and in limbo as they have not been carried out. What
is unusual about China´s credit policy in the region is the way it is done.
Beijing has chosen a particularly opaque bilateral method which rarely
discloses the terms or use of funds. Venezuela's legislature has not authorized
debts with China since the government treats them as "financing" to be paid for in oil, not dollars. Under this
dubious argument funds do not enter official accounting and escape all forms of
public control. If Nicolás Maduro is caught in the choice of paying debt or
feeding the population, few analysts doubt that his instinct for political self
preservation he will invoke a credit event and even interrupt oil shipments to
China in order to sell them on the spot market. Venezuelan Professor Ricardo
Hausmann, of the Harvard University Center for International Development de la
Universidad de Harvard, says Beijing is paying the price of its inexperience as
financier to emerging nations. "China
has ignored the main reason lender nations turn to the IMF to evaluate the
macroeconomics of the recipients: Lending money to support unsustainable
policies simply delays the day of reckoning." More in Spanish:
(Infolatam, http://www.infolatam.com/2015/02/24/hasta-cuando-sostendra-china-venezuela/)
Politics and
International Affairs
Teenager killed by police in San Cristobal protest,
city tense during funeral
A 14 year old teenager has been killed in the western
city of San Cristobal in a protest over the worsening economic crisis. He was
hit in the head by a bullet during a clash between hooded protesters and the
police. Home Affairs Minister Admiral Carmen Melendez confirmed the arrest of a
23-year-old policeman has been arrested in connection with the death. President
Maduro went on national television to regret the death of the student and call
for an end to violence. He said hatred against the government has led to dozens
of deaths in Venezuela and promised a full investigation. The streets of San
Cristobal, the Venezuelan city that sparked riots nationwide last year, were
deserted Wednesday after the funeral of a teenager shot by police the day
before. Schools were closed and businesses shuttered in the eastern
neighborhoods of the city of 700,000 near the Colombian border. Small groups of
youths burned trash in the streets to protest the killing. About 100 people
gathered at the spot where Roa was shot near the Catholic University of Tachira
Wednesday evening for an informal mass. Classes at all colleges and schools in
Tachira state have been suspended to minimize the risk of violence, said Joanna
Fernandez, a governor’s office spokeswoman. (BBC News, http://www.bbc.com/news/31616847?utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief;
Bloomberg. http://www.bloomberg.com/news/articles/2015-02-25/venezuela-riot-center-tense-ahead-of-killed-student-s-funeral)
Student leaders, opposition and NGO's seek repeal of
"mortal force" resolution
A group of student leaders, jurists, academicians and
opposition leaders have asked the Supreme Tribunal to annul resolution 8610 by
Defense Minister General Vladimir Padrino calls for the "use of
potentially mortal force" if required during demonstrations, and say it
"flagrantly violates the
Constitutional and is a license to kill". The Roman Catholic clergy,
led by the Episcopal Conference, is also asking authorities to refrain from
using illegal methods and weapons. San Cristóbal Bishop Mario Moronta says
"we beseech civil, millitary and
police authorities to refrain from illegal using methods or weapons against the
dignity of human beings". More in Spanish: (Infolatam, http://www.infolatam.com/2015/02/27/plantean-otro-recurso-contra-el-uso-de-fuerza-mortal-en-venezuela/)
International condemnation of Maduro regime grows, HRW asks UNASUR
to condemn abuses in Venezuela
- Human Rights Watch (HRW) has encouraged the Union
of South American Nations (UNASUR) to condemn serious human rights abuses
perpetrated by the Venezuelan government against political opponents and
demonstrators. HRW lamented that "neither
UNASUR nor its Member States –except for Colombia and Chile- have voiced
concern over the detention of political opponents and widespread abuses
perpetrated against demonstrators or pedestrians during demonstrations in
Venezuela last week".
- Federica Mogherini, spokesperson for the European
Union says "the recent
detention of Caracas mayor and veteran opposition leader Antonio Ledezma
is a cause for alarm, as well as reports of alleged intimidation and
mistreatment of other imprisoned opposition leaders and students that took
part in last year's protests".
- US Secretary of State
John Kerry called the murder of the child in Táchira horrible and said the
Venezuelan regime "continues to
move in the wrong direction", he told Congress that US
authorities have not yet frozen assets of Venezuelan officials accused of
violating human rights because of legal steps necessary in order to
implement the sanctions law.
- The European Parliament
held a plenary session on Venezuela's political situation and a majority
of members demanded the liberation of Caracas Mayor Antonio Ledezma and an
end to violence and repression here. Christos Stylianides, second in
charge of the European foreign action group, called the jailing of
opponents and restricting their rights "deplorable".
- Nobel Peace Prize
winner Oscar Arias, former President of Costa Rica, lamented the "absolute indifference" of
Latin American governments to what is going on in Venezuela. Brazil’s Lower House Plenary passed a “condemnation motion” against the
Venezuelan government, with the support of almost all of the 28 political
organizations in its Congress. In it, it accuses the Venezuelan government
of “breaking democratic principles,
with crimes against individual freedoms and due process.”
(Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42922&idc=1;
(El Universal, http://www.eluniversal.com/nacional-y-politica/150226/hrw-requires-unasur-to-condemn-abuses-in-venezuela;
and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/150225/consideran-motivo-de-alarma-caso-del-alcalde-de-caracas; El Nacional; http://www.el-nacional.com/)
Colombia's Santos offers to mediate between
Venezuela's government and opposition
Colombian President Juan Manuel Santos has said he is
willing to mediate between Nicolás Maduro's regime and Venezuela's opposition
"if asked by both parties",
in order to help solve the crisis the neighboring country is going through, and
said the so-called "troika""
made up of the Foreign Ministers of Brazil, Ecuador and Colombia stand ready to
help as soon as it is asked. He pleaded for respect for the rights of jailed
opponents here and "guarantees for a
due process". More in Spanish: (Infolatam, http://www.infolatam.com/2015/02/26/entrevista-santos-cuatro-noticias-editar/)
UN, OAS AND international organizations seek a
peaceful solution to Venezuelan crisis
UN Secretary General Ban Ki-Moon expressed his "worry about new reports of violence and loss
of life in Venezuela" and backed UNASUR efforts to reinitiate dialogue
between the government and opposition. OAS
Secretary General José Miguel Insulza regretted the death of a 14 year old
student and called for renewed dialogue. The Union of South American Nations (UNASUR)
also expressed grief over the death of the student and repeated its
availability to help find democratic and peaceful solutions. Former U.N.
secretary-general Kofi Annan has also asked Venezuela to resolve its domestic
political differences in a peaceful manner without resorting to violence. (El
Universal, http://www.eluniversal.com/nacional-y-politica/150226/oas-calls-for-dialogue-to-stop-violence-in-venezuela;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2375895&CategoryId=10717;
and more in Spanish: El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/150227/onu-inquieta-por-los-reportes-de-violencia-y-respalda-a-unasur)
Maduro charges paramilitary infiltration from Colombia
President Nicolás Maduro
called on policy and military to be on "maximum alert" because the US is "trying to infiltrate a group of paramilitaries from Colombia, dressed
as civilians, to cause violence". More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150226/maduro-denuncia-que-desde-colombia-infiltran-paramilitares; El Nacional; http://www.el-nacional.com/)
Venezuela to ask HSBC to name officials with Swiss
bank accounts
Venezuela will ask British bank HSBC Holdings PLC for
a list of state officials who have accounts in its Swiss subsidiary, the State
Prosecutor General said on Wednesday, following media reports that Venezuelans
were among the bank's leading clients. Venezuela and its citizens had some US$ 14.8
billion in assets in HSBC's Swiss private banking arm in 2007, the
third-largest for any country, according to data obtained by the International
Consortium of Investigative Journalists (ICIJ). (Reuters, http://www.reuters.com/article/2015/02/25/hsbc-venezuela-idUSL1N0VZ1UU20150225;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42920&idc=2)
Primary dates for opposition and government party have
been set for May
17th and June 21st, respectively. The National Elections Council has just made
the announcement. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150225/cne-fijo-fecha-de-primarias-de-mesa-de-unidad-y-psuv)
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.
