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, July 21, 2015

July 21, 2015

International Trade


Cargo that has arrived at Puerto Cabello:

  • 480 tons of personal care products such as shampoo and diapers from Procter & Gamble, Unilever y Kuehne Nagel for their affiliates
  • 433 tons of spare parts for vehicles for FORD Motor e IVECO
  • 198 tons of appliances (washing machines, microwaves and TVs) from MABE y Lilly Associates for their affiliates
  • 5 containers of tires from Pirelli for its branches


Cuba is now less dependent on Venezuela

The Cuba Standard Economic Trend Report Index shows Cuba becoming less dependent on Venezuela due to the economic crisis here and lower oil dependence on the part of Cuba. Q2 2015 trade exchanges contracted 5% as compared to Q2 2014, down from 20.4% to 15.4% and the new aperture toward the US could progressively de-link Cuba from Venezuela "without collapsing the Cuban economy". More in Spanish: (El Nacional;



Logistics & Transport


AVIOR buying 12 planes, adding international routes

Venezuelan airline Avior is purchasing 12 used planes to offer new international routes after foreign carriers have slashed flights due to currency controls. AVIOR President Jorge Anez said that the company was purchasing six planes from Europe's Airbus Group and six from Chicago-based Boeing CO for a total of about US$ 150 million. With its expanded fleet, Avior plans to add routes to Peru, Uruguay and Spain, its first European destination. Airlines have about US$ 3.7 billion from ticket sales trapped in Venezuela because of the country's 12-year-old currency control system, the International Air Transport Association said in June. International carriers have slashed flights to the socialist-run country while they try to repatriate the funds. "As a consequence of the circumstances, there are companies that have freed up space, and we're taking advantage of this opportunity," Anez said. The private Venezuelan airline is using 10-year financing from an international broker to purchase six Airbus A340-300s, four Boeing 737-400s and two Boeing 737-300s, Anez added. The first aircraft is due in September. The carrier, whose hub is in the small Venezuelan city of Barcelona, already flies to nearby Aruba, Brazil, Colombia, Curacao, Panama and the United States. (Reuters,


Andean Development Corporations loans Venezuela US$ 300 million for highway development

The Andean Development Corporation (CAF) has loaned Venezuela US$ 300 for highway improvement and services. More in Spanish: (Ultimas Noticias,



Oil & Energy


Venezuela oil basket falls below US$ 50

Venezuela's weekly oil basket price fell below US$ 50 for the first time since April as oil prices slipped in international markets on economic worries in Europe over Greece's debt crisis, a nuclear deal that would allow Iran to sell more oil, market turmoil in China, in addition to the U.S. market remaining amply supplied. 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 July 17 was US$ 49.89, down US$ 0.81 from the previous week's US$ 50.70. (Latin American Herald Tribune,


Venezuela’s oil export’s ideal price to balance the country’s finances should fluctuate between US$ 100/bbl. and US$ 180/bbl., according to some economists. Yet, others -less optimistic- believe the ideal price should be between US$ 200/bbl. and US$ 250/bbl., considering most of the revenue would be wandered away. The current export price is US$ 50.70/bbl. (Veneconomy,





Venezuela orders producers to divert food to state stores

The food industry association warns that Venezuela's government has ordered companies to distribute food staples to a network of state-run supermarkets amid chronic shortages of basic goods. Federal authorities ordered producers of milk, pasta, oil, rice, sugar and flour to supply between 30- 100% of their products to the state stores, he Food Industry Chamber said. Chamber President Pablo Baraybar warned that the order could cause major supply problems because there are 15 times as many private stores in the country as state-run ones. There are about 113,000 private stores as opposed to some 7,245 public distribution centers. Working-class shoppers often endure hours-long lines at government-run stores to buy staples at steeply reduced prices. (Associated Press,; and more in Spanish: Ultimas Noticias,; El Universal,; El Nacional;



Economy & Finance


New FEDECAMARAS head again calls for dialogue with government

Francisco Martínez, the newly elected President of Venezuela's main business organization (FEDECÁMARAS) says defending private enterprise and property rights will be their priority, along with seeking to dialogue with the Maduro regime.  "The key factor that would contribute to a rapid recovery of the economy is for the government to give up the idea that business is their enemy...Otherwise the economic crisis cannot be met successfully", he said. Martínez added that he firmly opposes an outdated ideological vision of the situation: "We believe the "economic warfare" speech is a pretext, a media device seeking to share responsibility. But the government knows very well, and we know it, that there are no deliveries, no single truck within the food industry that can move in this country without their authorization...It makes no sense for the government to keep on viewing private enterprise as its main enemy when in truth it contributes to solving many of its problems". More in Spanish: (DINERO,


FOREX reserves have reached a new low

FOREX reserves here have dropped to a new low since June 2003 - US$ 15.684 billion, 0.82% lower than the previous week. More in Spanish; (El Universal,


Former Chavez minister suggests simplification of FOREX controls here

Rodrigo Cabezas, former Venezuelan minister of finance and former president of the Finance Committee of the National Assembly, has suggested that the government should consider a simplification of the FOREX system in Venezuela. "In strict terms of economic policy, I believe that in the upcoming months or in the upcoming days, a simplification of the foreign exchange system could be implemented. (I do not mean) lifting the foreign exchange controls, for they continue to be a strictly economic measure." He explained that FOREX controls need to be revised for they could have become troubled by bureaucratic hurdles and corruption. (El Universal,


Venezuela at the bottom of the Big Mac index

According to The Economist, Venezuela ranks lowest in its Big Mac Index. It says the average price of the hamburger in the US on July 15th was US$ 4.79 and US$ 0.67 in Venezuela, when using the SIMADI rate which averages 199 VEB to the US dollar. The closest runner ups are Ukraine, India and Russia. More in Spanish: (El Nacional;


If Venezuela defaults, it will be as a result of all the government’s hasty and populist decisions in the face of difficult elections ahead, says analyst Moisés Naím. He explains the reason why FOREX controls are kept in Venezuela is that it has allowed chavista leaders to get immensely wealthy. (Veneconomy,



Politics and International Affairs


Guyana rejects Venezuela's issuing identity cards in the Essequibo

The government of Guyana announced it opposes Venezuela's plan to issue Venezuelan identity cards to residents of the Essequibo region, a territory that has been in dispute between both States for more than a century. "We will strongly resist any effort to issue identity cards to our people and we will do whatever we need to do as a nation to ensure that we are not diverted from our path to development," said Guyana's Minister of State Joseph Harmon. (El Universal,


Another opposition politician barred in Venezuela

A former Venezuelan state governor, Pablo Perez, says he has been barred from holding public office for 10 years. He is the third opposition politician to be disqualified in the past week. The state prosecutor's office barred a former congresswoman, Maria Corina Machado, and a former mayor, Enzo Scarano for 12 months. Both were expected to run in December's parliamentary elections, but Perez was not running for parliament. It was not clear on what grounds he was barred, but he was given 15 days to appeal against the decision. "Another attack against democratic dissidence", he wrote on social media. The opposition says the government of President Nicolas Maduro is clamping down on the opposition ahead of December's elections, which opinion polls have suggested the government could lose. (BBC News,


27 former heads of state from Latin America and Spain demand free and fair elections here

Twenty seven former heads of state from Latin America and Spain have written Venezuelan President Nicolás Maduro asking that upcoming parliamentary elections here in December 6th "be free, fair and impartial", and have repeated their "willingness to help as observers so that voting takes place within a climate of confidence and total transparency". Copies of their letter were sent to US President Barack Obama and OAS Secretary General Luis Almagro. The group is headed by Spain's former President José María Aznar, along with Felipe Calderón and Vicente Fox (México); Jorge Quiroga (Bolivia); Sebastián Piñera, Eduardo Frei and Ricardo Lagos (Chile); Andrés Pastrana, Álvaro Uribe and Belisario Betancur (Colombia); Miguel Ángel Rodríguez, Rafael Ángel Calderón, Laura Chinchilla, Óscar Arias and Luis Alberto Monge (Costa Rica); Osvaldo Hurtado, Lucio Gutiérrez, Sixto Durán Ballén and Gustavo Noboa (Ecuador); Alfredo Cristiani and Armando Calderón (El Salvador); Mireya Moscoso, Nicolás Ardito-Barletta and Ricardo Martinelli (Panamá); Juan Carlos Wasmosy (Paraguay); Alejandro Toledo (Perú); and Luis Alberto Lacalle (Uruguay). (Infolatam,


Approaching implosion? 

Evan Ellis, a professor of the Strategic Studies Institute of the U.S. Army War College (SSI) in Carlisle, Pennsylvania, recently published a report entitled "The Approaching Implosion of Venezuela and Strategic Implications for the United States." The paper speaks for Ellis and not for the U.S Army or government. Ellis considers that Venezuela is on the brink of collapse, which would have serious repercussions for Venezuela’s neighboring countries and the region. He claims that "the current regime in Venezuela is locked in an economic and political death spiral from which multiple reinforcing dynamics make it difficult to escape calamity." (Latin American Herald Tribune,


Diaspora grows

According to Simón Bolívar University’s sociologist and researcher Iván de la Vega, the number of Venezuelans who have left the country rose from 30,000, living in less than 20 countries in 1992, to 1.5 million, currently living in 94 countries out of the 193 member countries in the United Nations, according to formal migration records and census. (Veneconomy,


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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