March 24, 2015

International Trade

 

Puerto Cabello Terminal serviced 17.3% fewer ships during 2014

Puerto Cabello's maritime terminal received 236 fewer ships during 2014, a drop of 17.3%, according to the annual report by the Ministry of Aquatic and Air Transport. The terminal received 1,364 vessels during 2013 and only 1,128 in 2014, The port at La Guaira increased service by 9.5% and serviced 692 ships. Overall service by Venezuela's port authority (BOLIPUERTOS) dropped by 1%, down from 14.221 million MT in 2013 to 13.295 million in 2014. The report says "changes in national FOREX policies hurt the purchase of consumer goods and services, leading to a drop in ships arriving and lower movement of cargo received and stored." More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Puerto-de-Puerto-Cabello-recibio-173-menos-buques-durante-2014/2015/03/23/502669/)

 

Cargo that has arrived at Puerto Cabello

• Over 1,325 tons of grapes, pears and apples from Chile for state owned Banco Industrial and ACCA Alimentos
• Over 1,227 tons of beef and milk in 40 containers from Argentina
• Over 200 tons of beef from Argentina for state agency Banco del Tesoro

More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Llegaron-mas-de-mil-700-toneladas-de-alimentos-2374328/2015/03/18/500673/)

 

 

Logistics & Transport

 

ALITALIA cancels Venezuela service

ALITALIA's executive director Silvano Cassano has announced they will cancel the Caracas-Rome route - the Venezuelan government still owes them US$ 177.5 million. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

 

Oil & Energy

 

Petroleum Minister Chávez says Venezuela is prepared to end US oil exports

Asdrúbal Chávez, Minister for Petroleum and Mining, says Venezuela is prepared to face a scenario in which the US decides to stop oil imports from this country. He added that US officials have said energy is not included in President Obama's recent executive order, "but we do not believe that." More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/ministro-chavez--venezuela-esta-preparada-para-el.aspx#ixzz3Uv0t7fRZ; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/chavez-venezuela-esta-preparada-si-eeuu-decide-no-.aspx)

 

Venezuela oil price tumbles further, OPEC and Saudi Arabia estimate low prices will continue

Venezuela's weekly oil basket fell significantly for the second consecutive week as oil prices around the world fell as historically high levels of oil storage evidenced significantly oversupplied markets. According to figures released by the Ministry of Energy and Petroleum here, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending March 20 was US$ 43.72, down US$ 4.19 from the previous week's US$ 47.91. Both OPEC and Saudi Arabia's governor for OPEC, Mohammed al-Madi, are estimating low prices will continue. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2380176&CategoryId=10717; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43205&idc=4; and more in Spanish: El Universal; http://www.eluniversal.com/economia/150323/opep-seguiran-los-bajos-precios-en-mercado-mundial; http://www.eluniversal.com/economia/150323/que-esta-pasando; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/industria/arabia-saudita-duda-del-retorno-de-los-precios-alt.aspx#ixzz3VChKhzgG)

 

PDVSA’s crude oil production dropped 4% from 2.89 million barrels per day (bpd) in 2013 to 2.77 million bpd, according to the Venezuelan Oil and Mining Ministry’s annual report. The drop would be due to the low performance of the wells of light crude oil, according to the Ministry, exactly the kind of crude oil that is easier to market and transport. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43204&idc=4)

 

Power rationing could return in April if it does not rain in the next few days, warns Caracas, Vargas and Miranda Power Federation Secretary Elio Palacios. He explained the levels at the Guri Dam had been dropping significantly. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43220&idc=3)

 

 

Commodities

 

Lack of supplies paralyzes local industries, now operating under 50% capacity

Ismael Pérez Vigil, Executive President of the National Industrial Council (CONINDUSTRIA) says local industry is operating at under 50% capacity due to the lack of supplies. He denied companies are waging "economic warfare" and said they are operating at maximum but have no FOREX to acquire needed supplies. More in Spanish: (El Universal, http://www.eluniversal.com/economia/150323/falta-de-materia-prima-paraliza-a-industriales)

 

State owned VENALUM operated at 25% capacity during 2014, according to the annual report by the Ministry for Industries. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/industrias/venalum-opero-a-25--de-su-capacidad-instalada-dura.aspx#ixzz3VCgFp069)

 

Cement scarcity causes 80% paralysis of all construction projects nationwide

Orlando Chirinos, national coordinator for the National Cement Workers Alliance (ANTRACEM), reports that 80% of all construction projects nationwide are paralyzed due to scare materials and unemployment is rampant. "Venezuela produces 9 million MT of cement nationwide and today we have only 50% of capacity. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/gremios/sindicato-del-cemento-denuncia-paralizacion-de-80-.aspx#ixzz3VCgmWQNY)

 

Auto parts scarcity nears 75% nationwide, according to José Cinnirella, President of the Auto Parts Dealers Association (CANIDRA), because they have not received FOREX for imports since October 2014. More in Spanish: (Noticias24; http://www.noticias24.com/venezuela/noticia/278499/canidra-asegura-que-el-sector-autopartes-tiene-una-escasez-que-esta-cerca-de-75/)

 

Packaging materials industry inventories can only hold out to May

José González, president of the Venezuelan Packaging Industry Chamber (CAVENVASE) reports the packing industry here has inventories only through May due to the slow delivery of FOREX for importing supplies, spare parts and machinery. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43211&idc=3; and more in Spanish: El Mundo, http://www.elmundo.com.ve/noticias/economia/industrias/aseguran-que-industrias-de-envases-tienen-inventar.aspx#ixzz3VCfg3Y3U)

 

 

Economy & Finance

 

BARCLAY's sees 188% hyperinflation in Venezuela, Jefferies says 34% import cut needed

A report by BARCLAY's Capital says economic problems here have increased one month after the SIMADI exchange system went into effect, the bolivar has further weakened and there are practically "no dollars in the system". It indicates the new system is feeding inflation by depreciating the exchange rate.  "This situation increases economic risk of hyperinflation and a deep contraction...we expect 188% inflation in 2015". In a separate report, Jefferies says imports need to be cut by 34% - US$ 25 billion - this year in order to balance fiscal accounts. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

China may lend Venezuela US$ 10 billion in coming months

China could lend Venezuela around US$10 billion in coming months, half as part of a bilateral financing deal and the other half for the development of oil fields, according to a senior official at state oil company PDVSA. The first US$ 5 billion loan, a renewal of the long-standing Joint Chinese-Venezuelan Fund, will be destined for wide-ranging projects. With a five-year payment term instead of the usual three, the loan could be signed this month and deposited in Venezuela's international reserves in April. The other "special" US$ 5 billion loan will likely stipulate hiring Chinese companies to boost production in PDVSA's mature oil fields, and could be signed in June by Venezuelan state development bank BANDES for investing in 2015. China has already loaned Venezuela over U$ 45 billion in return for repayment in oil and fuel. (Reuters, http://www.reuters.com/article/2015/03/19/venezuela-china-idUSL2N0WL1OZ20150319)

 

Payments for expropriations up to US$ 12.998 billion, around US$ 12.547 still due

The Venezuelan government has paid out US$ 12.998 billion for expropriations since 2007. The includes the CANTV telephone company, Electricidad de Caracas, SIDOR, Banco de Venezuela, STATOIL, TOTAL, CHEVRON, Lácteos Los Andes, Cerámicas Carabobo and the HOLCIM, LAFARGE and CEMEX cement companies, among others. In addition, there are the indemnizations the government has had to pay in arbitrations at ICSID. According to ECOANALÍTICA, the total cost of expropriations is around US$ 25.555 billion, which means US$ 12.547 billion remain due depending on amounts finally decided by ICSID in cases still under review. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/pago-por-nacionalizaciones-asciende-a--12-998-mill.aspx#ixzz3Uuz5xqsA)

 

SIMADI FOREX rate climbs up to VEB 190.38/US$1
Venezuela's Central Bank reports the SIMADI official FOREX rate has climbed to VEB 190.38/US$1, its highest level to date. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/dolar-simadi-sube-y-se-cotiza-a-bs--190-38---grafi.aspx#ixzz3VIL48WZs; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/dolar-simadi-sube-y-se-cotiza-a-bs-190-38.aspx)

 

Executive Vice President says "neoliberal" economic rules "do not apply in Venezuela"

Executive Vice President Jorge Arreaza says there are "neoliberal" rules of the economy that "do not apply in Venezuela's case", including the relationship between liquidity and inflation in Venezuela since 1940. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/arreaza--hay-leyes-economicas--que-no-aplican-en-v.aspx#ixzz3VIJmYi66; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/gobierno-analiza-nueva-propuestas-economicas-segun.aspx; AVN; http://www.avn.info.ve/contenido/ejecutivo-y-comandos-populares-afinan-estrategias-para-impulsar-capacidad-productiva-del-p)

 

 

Politics and International Affairs

 

China steers clear of Venezuela-US dispute

Two days after the Obama Administration declared Venezuela a national security threat, China’s Foreign Ministry publicly reinstated its unwillingness to be dragged into the US-Venezuela disputes. In spite of intensifying economic ties between the two countries, China is determined to keep business as business, without making explicit political alliances in Latin America as its first government did in the 1950s and 60s. With a persistent attitude toward its foreign policy rhetoric of non-interference and respect for sovereignty, China has vowed to keep itself out of Latin America’s regional and bilateral disputes. (Latin Trade, http://latintrade.com/china-steers-clear-of-venezuela-us-dispute/)

 

Opposition, media and Catholic church under surveillance here with Cuban cooperation

According to the official report for 2014 by the Presidential office, the National Defense Council (SECODENA) spent most of 2014 writing reports for President Maduro on the Catholic church, media, the opposition, crime and the "economic crisis". The report - presented to the National Assembly by Executive Vice President Jorge Arreaza - lists "profiling Venezuela's Catholic Church, profiling Venezuelan opposition with a focus on ideological confrontation of capitalism vs. socialism with the US and its allied nations", as one of its accomplishments. It reports detecting 15,998 media economic reports unfavorable to government action. It also cooperates Cuban cooperation in technology for "monitoring and analyzing information" at "16 situation centers". During 2015 SECODENA plans to "analyze ideological socialism vs. capitalism confrontation, media warfare, Internet and social media", among others. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Iglesia-oposicion-ocuparon-Consejo-Defensa_0_596940471.html)

 

Spain supports Felipe González personal efforts on behalf of Leopoldo López, Antonio Ledezma

Spain´s Foreign Minister José Manuel García-Margallo has expressed support for the efforts of former Spanish President Felipe González on behalf of jailed Venezuelan opposition leaders Leopoldo López y Antonio Ledezma.  García Margallo said he had thanked González for informing the Spanish government of his personal initiative and added "I believe that is doing things right and wished him luck in that noble task". González has agreed to defend the dissenters because of the worsening situation of human rights in Venezuela and the lack of legal rights of the defendants, who are imprisoned at Ramo Verde military jail, in the outskirts of Caracas. (El Universal, http://www.eluniversal.com/nacional-y-politica/150323/felipe-gonzalez-to-defend-leopoldo-lopez-antonio-ledezma; http://www.eluniversal.com/nacional-y-politica/150323/spanish-fm-wishes-felipe-gonzalez-good-luck-defending-dissenters; and more in Spanish: El País, http://politica.elpais.com/politica/2015/03/23/actualidad/1427112645_130675.html)

 

Over 25 media have changed hands and editorial policies here over the past 5 years

According to a study of the Press and Society Institute (IPYS) over 25 media have changed owners in Venezuela over the past 5 years. The study reports that - after selling out - editorial policies were changed to incorporate more official information, eliminate investigations and criticism, and incorporate "trivial" content. The sales were preceded by legal procedures that ended after ownership and editorial policies changed. It also indicates there is a direct relationship between the new owners and "political players linked to the national or local chavista government". More in Spanish: (Infolatam, http://www.infolatam.com/2015/03/21/mas-de-25-medios-cambiaron-de-dueno-en-venezuela-en-cinco-anos-segun-el-ipys/)

 

Government promotes militias in all state enterprises

Defense Minister General Vladimir Padrino says the government is promoting the creation of "combat forces" in state enterprises in order to meet an eventual attack by the US. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politica/gobierno-impulsa-creacion-de-milicias-en-todas-las.aspx#ixzz3VCgUNwkJ

 

Eastern Caribbean States Worried about U.S.-Venezuela Tensions

The Organization of Eastern Caribbean States, or OECS, has expressed concern over increasing tension between the United States and Venezuela. “The OECS is deeply concerned that statements and actions in the recent past concerning the relations between the United States and Venezuela have served only to heighten tensions in the relations between those countries, and to undermine the peace and security of the region and the hemisphere as a whole,” the group said in a statement. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2380154&CategoryId=10717)

 

 

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.