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.

Tuesday, March 17, 2015

March 17, 2015


International Trade

 

Cargo that has arrived at Puerto Cabello:

  • 2,676 tons of coffee from Nicaragua and Honduras for state agency Café Venezuela
  • Over 1,000 tons of black beans from Panamericana for state agency Corporación de Abastecimientos y Servicios Agrícolas (CASA)
  • Over 297 tons of cardboard from the US for Tetra Pak Global Supply.
  • Over 140 tons of auto parts in 16 containers from Jacksonville from Ford for its local affiliate.
More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-dos-mil-toneladas-de-cafe-llegaron-al-puerto-carabobeno-2370973/2015/03/15/499094; http://www.notitarde.com/La-Costa/Llegaron-mas-de-140-toneladas-de-autopartes-al-puerto-carabobeno-2372398/2015/03/16/500278)

 

 

Logistics & Transport

 

Ship traffic at Venezuelan ports almost unchanged in 2014

Ship traffic at local ports dropped 1% during 2014, 28 vessels less than in 2013, according to official reports. The Ministry for Aquatic and Air Transport reports the port authority served 2,845 ships during 2014, bearing 13.295 million metric tons, compared to 2,873 ships and 14.221 metric tons in 2013. The port authority says "changes in the nation's FOREX policy hit the purchase of services and consumer goods". It also reports "insufficient depth for ships bearing more than 30 thousand metric tons". Port expansion was hurt by "difficulties in obtaining construction material such as cement, steel rods and others". More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/movilizacion-de-buques-en-puertos-venezolanos-casi.aspx#ixzz3UdONGiPr)

 

Maritime transport in for slow recovery

Robbert Van Trooijen, Maersk's President for Latin America and the Caribbean, says the shipping industry "is in a complex situation, there have been no profits for a long time, there is a cost benefit with low oil prices, but it has overall lost around US$ 22 billion over the past 7 years, we need to seek a solution" Van Trooijen reports Maerst is doing "well", but other companies do not show "return on investment", so he sees "the future means consolidation" because it is "a very disperse industry, with many competitors". He believes "the industry will suffer for a decade" ahead. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/sera-lenta-la-recuperacion-del-transporte-maritimo.aspx#ixzz3UXbCFog6)

 

 

Oil & Energy

 

Venezuela's oil giant embraces pragmatism

PDVSA is granting its minority partners more financial and operational sway in joint ventures. A dozen of those foreign oil companies are also poised to tap the most favorable exchange rate of Venezuela's complex three-tiered currency system. Some of the firm's roughly 150,000 employees have been laid off, particularly those with overt political roles, and hundreds of oil ministry staffers have also been let go. "They're trying to find mechanisms to give people confidence in investing, and also trying to increase production," said one foreigner close to joint ventures. Minority partners are to garner more control over their oil fields, including hiring rigs themselves instead of relying on a PDVSA service unit, possibly saving tens of millions of dollars, people familiar with the matter say. The company is now offering some partners an increase in ownership, which could attract more much-needed capital. However, some recent appointments at the company also suggest it does not enjoy full autonomy. New Chief Financial Officer Carlos Malpica is a relative of Cilia Flores, Maduro's wife and close adviser, while some former members of the military have been tapped for posts in the supply and trade departments. "The strong pressure on PDVSA to generate resources is increasing," said Richard Obuchi, local economist and energy specialist. "Actually, I think it would almost be a big success if they managed to maintain current production levels." (Reuters, http://mobile.reuters.com/article/idUSL1N0WF06320150313?irpc=932&ref=browsi)

 

Venezuela oil price falls back below US$ 50

Venezuela's weekly oil basket fell back below US$ 50 after one week above. According to figures released by the  Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending March 13 was $47.91, down US$ 2.85 from the previous week's US$ 50.76. According to Venezuelan government figures, the average price in 2015 for Venezuela's mix of heavy and medium crude is now US$ 44.84. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2378499&CategoryId=10717)

 

Venezuela and Trinidad & Tobago to jointly exploit crude on the border

Venezuela and Trinidad & Tobago have agreed to jointly exploit the Manakin-Cocuina oil area on the border, and will distribute 34% to Venezuela and 66% to Trinidad and Tobago. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/industria/venezuela-acordo-explotar-yacimientos-de-crudo-fro.aspx#ixzz3UdTFVORI; El Nacional; http://www.el-nacional.com/)

 

Venezuela ordered to pay oil firm Tidewater US$ 46 million after vessels seized

A World Bank tribunal has ordered Venezuela to pay oil service company Tidewater around $46 million in compensation for seized vessels, in a decision the government here hailed as a victory. Venezuela's Ministry of Petroleum said the award favored Venezuela, as it rejected an "exorbitant compensation" sought by the US oil services company. (Reuters, http://www.reuters.com/article/2015/03/15/us-venezuela-tidewater-idUSKBN0MB0QT20150315; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2378552&CategoryId=10717; El Universal, http://www.eluniversal.com/economia/150316/venezuela-should-indemnify-tidewater-for-usd-464-million; http://www.eluniversal.com/economia/150316/petroleum-ministry-says-that-icsid-award-favors-venezuela)

 

 

Commodities

 

SIDOR worked at 22% capacity during 2014

The yearly report from the Ministry of Industries says the SIDOR steel company operated at 22% capacity during 2014, down by 8.3% from 2013. It blames work stoppages for the decrease in production. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/sidor-opero-a-22--de-su-capacidad-instalada-en-201.aspx#ixzz3UdQuxdvK)

 

 

Economy & Finance

 

Government says pays off 1 billion euro Global 2015 bond

Venezuela has paid off its 1 billion euro Global 2015 bond that came due on Monday, says Finance Minister General Rodolfo Marco Torres, the first foreign debt maturity in a year of heavy bond payments that have stretched the nation's coffers amid a period of low oil prices. Concerns that Venezuela could default on foreign debt have pushed yields to the second highest of any emerging market nation. President Nicolas Maduro has dismissed default talks as a smear campaign against his administration.  Venezuela also paid 70 million in interest on the bond, Marco added. (Reuters, http://www.reuters.com/article/2015/03/16/venezuela-debt-idUSL2N0WI1O820150316)

 

Maduro vows to meet financial obligations "even if oil reaches US$ 20"

President Nicolás Maduro lashed out at credit reporting agencies for giving Venezuela a high risk rating, and says they do so "for political reasons". He says the nation will continue to meet financial obligations "despite oil prices". More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/maduro-promete-cumplir-obligaciones-financiera-asi.aspx#ixzz3UdP0mG8D; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/gobierno-dice-que-cumplira-con-obligaciones-intern.aspx; Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/venezuela-ratifica-compromiso-pago-compromisos-internacionales)

 

FOREX rate at SIMADI soars by VEB 17.75 per US dollar in a month

The FOREX rate at the Foreign Exchange Marginal System (SIMADI) climbed by VEB 17.75 per US dollar in a month of operations in the free floating exchange market, which is supervised by the Central Bank of Venezuela (BCV).
SIMADI started operations at financial institutions, exchange offices and stock exchanges, at a rate of VEB 170.03 per US dollar. On Friday March, 13, the rate hit VEB 187.78 per US dollar, a 10.43% increase from February 12.
(El Universal, http://www.eluniversal.com/economia/150316/forex-rate-at-simadi-soars-by-veb-1775-per-us-dollar-in-a-month)

 

 

Politics and International Affairs

 

Maduro given power to rule by decree for nine months

The Venezuelan parliament has approved a law giving the president, Nicolás Maduro, the power to legislate by decree for nine months in the face of what he described as threats by the US government. Maduro requested the expanded powers in response to new US sanctions on Venezuelan officials accused of human rights violations. The resolution grants Maduro power to legislate in economic affairs in order to "protect the people and the State against aggression from foreign and domestic sources... intended to upset or distort production, trade, the economic or financial system". Critics of Venezuela’s government have called the move a power grab. (The Guardian, http://www.theguardian.com/world/2015/mar/16/venezuelan-president-nicolas-maduro-given-power-to-rule-by-decree; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2378633&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/150316/venezuelas-president-maduro-granted-special-ruling-powers-for-9-months; Fox News, http://www.foxnews.com/world/2015/03/16/venezuela-parliament-approves-decree-powers-for-maduro/; and more in Spanish: El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/maduro-podra-legislar-para--proteger-al-pueblo-y-a.aspx#ixzz3UdSCEAWk; El Universal, http://www.eluniversal.com/nacional-y-politica/150317/en-gaceta-extraordinaria-oficializan-ley-habilitante-al-presidente)

 

Government conducts military exercises amid US tensions

Soldiers rolled out shoulder-fired missiles, fighter planes and armored trucks Saturday for the first of 10 days of military exercises that President Maduro says are needed to protect against a looming threat from the U.S. As nearly 100,000 members of the armed forces began conducting exercises across the country, Venezuela's government got support from South American nations, which criticized the U.S. for the way it imposed sanctions on Venezuelan leaders. (Fox News, http://www.foxnews.com/world/2015/03/15/venezuela-conducts-military-exercises-claims-us-threat/)

 

President Maduro to send letter asking US government to repeal executive order

President Nicolás Maduro says he will demand that the US government abolish the executive order stating that the situation here "constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States." He also said he will send an open letter to the people of the United States and President Barack Obama to denounce "imperial aggression." The letter will be released in The New York Times, he said. (El Universal, http://www.eluniversal.com/nacional-y-politica/150316/president-maduro-to-send-letter-asking-us-govt-to-repeal-executive-ord)

 

ALBA readies its stance for the Summit of the Americas

The Bolivarian Alliance for the People of the Americas is meeting in Caracas to coordinate a joint position during the upcoming Summit of the Americas in Panama, amid tension between Venezuela and the US over sanctions on Venezuelan officials and terming the Venezuelan government a "threat". The leaders of South America’s leftist governments have come out in support of Venezuela, while Washington has denied Maduro’s claim that it is seeking to undermine his government and urged him to focus on Venezuela’s domestic problems, including food shortages and soaring inflation. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150317/alba-prepara-su-posicion-para-la-cumbre-de-las-americas)

 

UNASUR foreign ministers suggest that Red Cross could visit Leopoldo López

The foreign ministers of Brazil, Colombia and Ecuador have "informally" asked President Maduro to allow a Red Cross mission to visit jailed opposition leader Leopoldo López. The request was reported by Ecuador's Foreign Minister Ricardo Patiño, adding that it could be "useful in clearing any doubt that Venezuela is torturing opponents, as some people say". Patiño added: "I am personally absolutely certain it is not so." The Union of South American Nations (UNASUR) has rejected the U.S. decision to label Venezuela a security threat and sanction seven officials, lending President Nicolas Maduro regional support in the diplomatic dispute with Washington. Foreign Ministers of the twelve-country Union of South American Nations (UNASUR) called for a revocation of the measures, which Maduro has blasted as an attempt to unseat him. "It constitutes an interventionist threat to sovereignty and the principle of non-interference in the internal affairs of other countries," UNASUR said in a statement from Ecuadorian capital Quito. (Reuters, http://www.reuters.com/article/2015/03/15/us-venezuela-usa-unasur-idUSKBN0MB01620150315; El Universal, http://www.eluniversal.com/nacional-y-politica/150316/unasur-fms-ask-the-us-to-repeal-executive-order-on-venezuela; and more in Spanish: http://www.eluniversal.com/nacional-y-politica/150317/cancilleres-de-unasur-plantearon-a-maduro-que-la-cruz-roja-visite-a-lo)

 

Spanish FM rules out debate on sanctions against Venezuela

Spanish Foreign Affairs Minister José Manuel García-Margallo has said that addressing the matter of US sanctions imposed on Venezuelan officials in the European Union "does not make any sense," because Venezuela's situation does not pose a threat to security in Europe, in his view. He added that the US "has declared that the situation in Venezuela constitutes a threat to its national security. I do not have the data to confirm whether that statement is true or not." (El Universal, http://www.eluniversal.com/nacional-y-politica/150316/spanish-fm-rules-out-debate-on-sanctions-against-venezuela)

 

Former Spanish president willing to serve as a mediator in Venezuela

Former Spanish President Felipe González said he is willing to volunteer as a mediator to resolve the current situation in Venezuela, and he voiced concern about Latin America s lack of reaction. González stated that in Venezuela "there are political prisoners because they are politicians," Efe quoted. (El Universal, http://www.eluniversal.com/nacional-y-politica/150316/former-spanish-president-willing-to-serve-as-a-mediator-in-venezuela)

 

Court of Appeals upholds López's detention

The Court of Appeals of Caracas Criminal Judicial Circuit has dismissed an appeal brought by the counsels for the defense of Venezuelan opposition leader Leopoldo López, against a decision issued by the 28th Trial Court in the Criminal Judicial Circuit. According to the Court, the detention is well founded. In addition, it says there was no infringement of Article 23 of the National Constitution and that Articles 174 and 175 of the Organic Code of Criminal Procedure were duly enforced. (El Universal, http://www.eluniversal.com/nacional-y-politica/150316/court-of-appeals-upholds-lopezs-detention)

 

 
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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