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.

Friday, June 5, 2015

June 05, 2015

International Trade


Cargo that has arrived at Puerto Cabello:

  • 2,444 tons of transformers, hardware and high capacity plants for China Machinery Engineer, (CHME), PDVSA and CORPOELEC
  • Over 2,000 plant parts for state agency CORPOELEC
  • Over 417 tons of refined edible oil from Oil Dri Corporation for Alimentos Polar
  • Over 200 tons of xilenium for state agency PEQUIVEN
  • Over 171 tons of paper filters for PDVSA Petróleo
  • Over 14 tons of parts from Ford Motors for their Venezuelan affiliate.
More in Spanish: (El Carabobeño,


US-Venezuela balance of trade is down 37.13% during the first 4 months this year, according to the US Census Bureau - from US$ 13.49 billion in 2014 to US$ 8.48 billion now. Venezuelan exports to the US contracted 46.49%, and 93.84% of this were oil exports. More in Spanish:  (El Nacional;



Oil & Energy


Iraq, Venezuela see US$75-80 as "fair" price for oil

The top oil officials of Iraq, Venezuela and Angola have said that US$ 75 to US$ 80 a barrel was now a "fair" price for oil, reflecting an emerging consensus on a possible new equilibrium for volatile markets. "The equitable price will be between US$ 75 and US$ 80," Iraqi oil minister Adel Abdel Mahdi told an OPEC seminar in Vienna. "We share the same opinion of the minister of Iraq regarding this issue," Venezuela's oil minister Asdrubal Chavez said. Oil ministers from Iran and Ecuador declined to comment. Angolan Oil Minister Jose Botelho de Vasconcelos said US$ 80 per barrel is a good price for producers. "For consumers you must ask them," he said. (Reuters,


Venezuela finds new front in attack on U.S. fracking: water

Venezuela sought to open a new front in its months-long verbal assault on the U.S. shale oil industry on Wednesday, suggesting it posed a grave threat to water supplies. In the latest criticism of the hydraulic fracturing technology that has yielded a gusher of crude supplies in Venezuela's biggest oil market, oil minister Asdrubal Chavez cited the "huge environmental impact" from shale. "This does not seem to raise any concerns among the governments promoting it or the companies involved," he told an OPEC seminar in Vienna attended by chief executives of some of the world's biggest oil companies, including EXXON and BP, both of which operate in U.S. shale. (Reuters,





Hospital patients are being asked to import their own supplies

The severe scarcity in medical and surgical supplies has led some clinics to ask patients undergoing treatments such as procedures or elective surgery to import necessary supplies because the health centers do not have them, according to medical sources. This has happened in cases of haemodynamics,  hemodiálisis, laparoscopies, and inter-ocular lenses. More in Spanish: (El Nacional;


The chicken production deficit in the country is 50,000 tons per month, according to Venezuela’s Poultry Federation Chief Simón Leal. He explains the industry barely places 70,000 tons out of the 120,000 needed, and added it requires US$ 2.5 billion a year or US$ 208 million a month to recover production. (Veneconomy,



Economy & Finance


LATINVEST estimates Venezuela's international reserves are crashing, could run out in 8 months

Last week, Venezuela's foreign reserves started the week at US$ 17.526 billion.  Yesterday after the close, Venezuela's Central Bank reported that the reserves have now fallen to a new 12 year low of US$ 16.897 billion as of Wednesday, June 3. Venezuela has now burned through US$ 7.357 billion in reserves in 3 months since February 27.  That is an unsustainable average drawdown of over half a billion a week.  If that burn rate was to continue, it would mean that the country would run out of reserves in 8 months – and this is not factoring in the huge maturity, amortization and interest bulge of over US$ 5 billion that Venezuela will hit in October and November - at the same time that the government will theoretically be wanting to spend extravagantly to fund its electioneering: Sources in the government seem to be pointing to December 6, the anniversary of the election that brought Chavez to power in 1998.  Meanwhile, the bolivar's depreciation continues to gather speed, and the currency is now at 438 bolivars to the dollar in the black market, with the dollar doubling against the bolivar in just 3 months. At the same time, the government continues to print bolivars, with M2 money supply up over 70% in just the last 12 months.  (Latinvest:


FOREX reserves have been dropping an average US$ 49 million daily this year, according to a report by ODH Análisis Venezuela. Añade que ha habido mayores disminuciones específicas en los momentos de pago de deuda. Over the past 3 days reserves rose by US$ 306 million due to an increase in the price of gold - which is the largest part of reserves held by the Central Bank of Venezuela. More in Spanish: (El Nacional;; and El Universal;


Daily FOREX allocations have been cut 71% to US$ 40.6 million in the first four months of this year, according to ECOANALÍTICA, down from US$ 140 million during the same period in 2014. There have been no bids since October 2014. (Veneconomy,


FOREX rate change under study

An unofficial source reports the Government is analyzing a correction in the FOREX rate and devaluating the VEB 6.3/US$ 1 to VEB 25/US$ 1, for all imports going through the Foreign Trade Center. The new devaluation would also imply a subsidy program for food and medicines. More in Spanish: (El Nacional,


CONINDUSTRIA reports the number of active companies is down 60% nationwide since 1998

The National Council of Industries (CONINDUSTRIA) reports that the number of active companies is 60% less than in 1998, and says the only way to reactivate the economy over the next 10 years is to implement effective public policies to stimulate innovation, investment and entrepreneurship. "There were around 15,000 industrial companies in 1998 and we are now down to little more than 5,000. We have continued shrinking this year." More in Spanish: (GLOBOVISION,



Politics and International Affairs


ECOSOC, ILO slam Venezuela's "economic warfare" excuse for harassing businessmen

The argument that business and the opposition are plotting to leave the country without food, medicines, and other products in order to discredit the Venezuelan government seems increasingly implausible to the world. The United Nations Committee on Economic, Social and Cultural Rights (ECOSOC) on Wednesday questioned the Venezuelan government for attributing most of domestic troubles to "economic warfare." The country was scrutinized in a regular exercise of the UN Member States that have ratified the Convention on Economic, Social and Cultural Rights. Colombian expert Rodrigo Uprimmy asked Planning Minister Ricardo Menéndez: "When there is progress it's due to the revolution and where there are problems it is due to economic warfare? Clarify what you mean by "economic warfare".  Menendez asked the UN to "be respectful...not make value judgments...and not trivialize economic warfare, which is to manipulate international markets to lower the price of crude oil, destabilize the national currency, and raise the country risk for Venezuela." China's Shiqiu Chen asked for details: "Your policies seem to be hurting everyday people, who is this economic warfare against". Menendez remarked that despite the situation the country has not lowered social investment. On Thursday, the International Labor Organization (ILO) rejected the use of this argument by Venezuelan authorities to justify its constant harassment of businessmen and some union leaders. "That argument is untrue to the international vision," said ILO expert Rafael Echeverría during Venezuela's evaluation of trade union freedoms. The head of the Venezuelan delegation, Labor Relations Vice-Minister Elio Colmenares argued that the Venezuelan Federation of Chambers of Commerce and Industry (Fedecámaras) kept on planning, funding, and heading the economic war against the government. (El Universal,;; and more in Spanish: El Universal,; El Nacional;


UN, US seek freedom for López and Ceballos, as 24 people remain on hunger strike over political prisoners. The United Nations has expressed its concern over Venezuela’s political prisoners, and asked to guarantee medical attention to those now staging a hunger strike. The US State Department expressed "deep concern", urged the Venezuelan regime to guarantee their well being, and stated "we join the international community in seeking their immediate freedom." Former San Cristóbal Mayor Daniel Ceballos has lost 10 kilos since starting his hunger strike 14 days ago. López joined him 12 days ago. (Veneconomy,; and more in Spanish: El Nacional;


Monsignor Lückert reports "the Pope is concerned over Venezuela's situation"

Pope Francis is concerned over the situation in Venezuela, insecurity, disrespect of human rights, and political prisoners, according to Monsignor Roberto Lückert León, who held a meeting with the Pope last Monday. "There are lot of things that both he and people outside our country, cannot understand, such as an immensely rich country like Venezuela is an immensely poor country", Lückert said. As chairman of the Episcopal Commission of Media in Venezuela explained that for the Pope to come here, there must be a move by the Bishops' Conference and the government. (El Universal,


United opposition coalition sets protest agenda

The Executive Secretary of the United Democratic Conference (MUD), Jesús Torrealba, has announced an agenda agreed to by the coalition to settle disagreements after the unilateral call by the Voluntad Popular party for a demonstration last Saturday. "The best decision is that made by all of us together, because is the strongest one, the one capable of going far," Torrealba. The heads of the opposition parties gathered in support of the agenda provided by the wives of  Leopoldo López, Daniel Ceballos and Antonio Ledezma. (El Universal,


Dissident socialists urge regime to investigate corruption

Dissident and former members of Venezuela's ruling Socialist Party have asked the regime to investigate alleged multi-billion dollar frauds they say have flourished under the country's strict currency controls. MAREA SOCIALISTA, a small group of leftist intellectuals, as well as fringe members of the Socialist Party, say corrupt companies and complicit officials are gaming a currency system designed to control imports ranging from foods to medicines. (Reuters,


Simultaneous attacks against two opposition mayors’ offices

El Hatillo Mayor David Smolansky, a militant of Voluntad Popular, has denounced that armed pro-government groups attacked two mayors’ offices headed by members of his party: The Páez District’s in Apure whose mayor was removed by the TSJ, based on an irregular decision from the district’s council and Mario Briceño Irragorri’s in Aragua state where a municipal worker, camera man Alejandro Ledo, was thrown off a balcony. (Veneconomy,; El Universal,


 Venezuela does not cooperate in the fight against drug trafficking", according to US Southern Command Chief General John Kelly in statements at the International Conference against Illegal Drugs held in Cartagena, Colombia. He pointed out a significant amount of the cocaine going to Europe or the United States leaves from Venezuela. He added Venezuela is the only country in the region with which there is no cooperation. The Venezuelan Ministry of Foreign Affairs quickly issued a communiqué rejecting Kelly's remarks, and said that such statements harm "efforts" to normalize bilateral relations. (Veneconomy,; El Universal,


Maduro claims an opposition legislator is implicated in Congressman Serra's murder

Julio Vélez, a former alderman in Cúcuta, Colombia, has been arrested and charged with masterminding the murder of pro-government legislator Robert Serra and his assistant. National Assembly President Captain Diosdado Cabello reports Vélez's connections in Venezuela are being investigated, and confirms that Vélez is a fugitive of Colombia's justice for murdering his wife and other crimes. He added that his father manages brokerage firms on the border are "the ones that plot to economically destabilize the country." Later, President Nicolás Maduro said an opposition legislator from the United Democratic Conference (MUD) could be implicated in the case, but did not provide a name. (El Universal,; and more in Spanish:


Maduro suggests Maradona as FIFA President

President Nicolás Maduro says the FBI investigation of corruption in the international soccerl federation, FIFA, is a maneuver to wrest the seat of the World Cup away from Russia and Qatar in 2018 and 2022. He also suggested that Argentina's former soccer star Diego Maradona - a fan of both the Castro and Maduro regimes - should take over the reins of FIFA from Joseph Blatter. Maradona has for a long time denounced corruption at the highest levels of FIFA. More in Spanish: (Infolatam,


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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