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.

Thursday, July 23, 2015

July 23, 2015


International Trade

 

Cargo that has arrived at Puerto Cabello:

  • 14,411 tons of chicken and beef in 434 containers from JBS Brazil for state agency CASA.
  • 3,500 tons of whole milk and margarine in 113 vans from JBS Brazil for state agency CASA.
  • 357 tons of spare auto parts in 34 containers from FORD and Kuehne Nagel in the US for their local affiliates.
19 ships are offloading cargo, 13 of them carrying bulk and 2 of them containers. More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-17-mil-toneladas-de-alimentos-llegaron-a-Puerto-Cabello-2467646/2015/07/22/561679)

 

 

Oil & Energy

 

Oil prices drop following Iran nuclear deal and excess supply

West Texas intermediate oil prices (WTI) dropped 3.31% to US$ 49.19 per barrel after it was announced that US reserves rose to 2.5 billion barrels - the highest level for this time of the year in 8 decades.  More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/industria/petroleo-cae-tras-pacto-nuclear-con-iran-y-exceso.aspx#ixzz3gi6zzDXq)

 

 

Commodities

 

Diverting food shipments violates consumer rights

Roberto León Parilli, President of the National User and Consumer Alliance charges "the government is admitting that its own food companies are not producing at 100% capacity and not meeting demand", and says that the latest order to divert 30-100% of priority products from private markets to public facilities violates citizen rights to chose. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Desvio-alimentos-viola-derecho-consumidores_0_669533265.html)

 

 

Economy & Finance

 

BOFA projects Venezuelan fiscal deficit at US$ 20.2 billion this year

Bank of America Merrill Lynch now estimates Venezuela's fiscal deficit will be US$ 20.2 billion at the close of 2015.

The bank estimates national income is down by US$ 43.1 billion in the past two years, and that "the adjustment in imports and PETROCARIBE dispatches, as well as capital outflows, will have a cutback of US$ 31.7 by the end of the year", but despite it all Venezuela will have to finance a US$ 14.1 billion gap and that although the country may be able to hold out for two years this economic trend is "clearly unsustainable". More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Calculan-deficit-millardos-ano_0_669533194.html)

 

International reserves down nearly 4% since July 1st

International reserves have dropped to a new low of US$ 15.611 billion this year, almost 4% since the start of this month, The drop in the price of gold is driving the trend further since most of Venezuela's reserves are held in gold. More in Spanish;  (El Universal;http://www.eluniversal.com/economia/150722/que-esta-pasando)

 

What lies behind secrecy in Venezuela's economic data 

The Central Bank of Venezuela (BCV) has broken with the routine of releasing monthly national economic data, as required by law, and turned it into a matter of total secrecy. Beginning in 2013, the BCV started to delay the release of economic figures, ending the year with the blatant omission of its Annual Report.  Delays have become more usual and prolonged ever since, and now in 2015 there is a total absence of information about the performance of the economy, to such an extent that official figures are some of the greatest enigmas in Venezuela today. This silence on the part of the Central Bank has led analysts to find alternative sources. One of these is the Center for Documentation and Social Analysis of the Venezuelan Federation of Teachers (Cendas-FVM), which for over 20 years has been releasing the cost of the basic basket of goods for a household comprised of five individuals on average incomes. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2392700&CategoryId=10717)

 

Venezuela could fall into hyperinflation before the end of the year, according to CENDAS-FVM’s Chief Oscar Meza. Meza explained this takes place when the monthly inflation rate is higher than 50% or when it’s 200% one year and 400% the next. CENDAS also reported the average family basic food and consumer goods basket skyrocketed to Bs.54,204.69 in June, up Bs.11,357.78 (26.5%) from May. Annualized variation for the June 2014-June 2015 term is 163.6% or Bs.33,643.84. A five-member family needs eight minimum wages to cover the cost. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44780&idc=2; http://www.veneconomy.com/site/index.asp?ids=44&idt=44770&idc=2)

 

The Central Bank (BCV) has called a US$ 600 million bond bid for individuals, savings funds and similar savings associations from the public sector to participate via commercial and universal banks. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44779&idc=2)

 

 

Politics and International Affairs

 

Poll shows opposition candidates 17% ahead of regime in voter intentions

DATANALISIS President Luis Vicente León says that opposition candidates are 17 points ahead of government candidates in voter intentions on December 6th parliamentary elections. "47.5% of the population is sure to vote in these elections, and 73% say they will evaluate doing so", he adds. Polls show 84% believe the country is in bad or very bad shape, which "discourages people, above all the younger people who do not feel a part of it and start to seek alternatives." More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Luis-Vicente-Leon-Intencion-oficialismo_0_669533161.html)

 

Opposition will present a united ticket on December ballot

Chuo Torrealba, Executive Secretary of the opposition Democratic Unity Conference (MUD) has announced that all opposition parties finally agreed to present candidates for the upcoming December 6th parliamentary election on a united single ticket on the ballot, as well as coordinate all election strategies under a unified command. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/MUD-Tarjeta_Unica_0_669533254.html)

 

Maduro's triple strategy to win the upcoming parliamentary elections

President Nicolás Maduro is displaying a three pronged strategy to win the upcoming legislative elections on December 6th, with which he seeks to avoid an opposition takeover of the National Assembly. In the first place, the entire government apparatus is being used to block and discourage opposition participation, through such devices as disqualifying candidates already selected in primary elections. Second, by distracting attention through an inflammation of border tensions with Guyana and calling opposition leaders such as Henrique Capriles "traitors"; and third, by trying to hide the national economic crisis and evading any sort of economic adjustment that could further take away support even if this is pushing the nation into hyperinflation. More in Spanish: (INFOLATAM, http://www.infolatam.com/2015/07/22/esta-es-la-triple-estrategia-de-maduro-para-ganar-las-elecciones-legislativas/)

 

Guyana opposes Venezuela’s Plan to Issue IDs in Contested Region, will not halt investments in the area

The government of Guyana said it would resist any effort by Venezuela to issue identification cards to residents of the contested Essequibo region. “We will stoutly resist any effort to have our people issued with cards and things like that, and whatever we need to do as a nation to ensure that we are not distracted in any way from our path of development we are going to do it,” said Minister of State Joseph Harmon. He was reacting to comments from the head of Venezuela’s Office for the Rescue of the Essequibo, Pompeyo Torrealba Rivero, who said efforts would soon be made to issue Venezuelan identification cards to an estimated 200,000 people born in the region. At the same time, Guyanese Foreign Minister Carl Greenidge said his country would not halt investments in the 159,000 square kilometer region, and again stated an International Court decision in the dispute since the other routes for a solution have been exhausted.(Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2392726&CategoryId=10717; and more in Spanish: (El Nacional; http://www.el-nacional.com/)

 

Guyana's president visits the US to discuss dispute with Venezuela

The President of Guyana, David Granger, has traveled to Washington to discuss the border dispute between his country and Venezuela over the region of the Essequibo, against the backdrop of the US Conference on Hemispheric Security and Defense. Granger will meet with representatives of the US Department of State. (El Universal, http://www.eluniversal.com/nacional-y-politica/150722/guyanas-president-visits-the-us-to-discuss-dispute-with-venezuela)

 

Kerry hopes aperture toward Cuba will propel US-Venezuela talks

At a joint press conference with Cuba's Foreign Minister Bruno Rodríguez, US Secretary of State John Kerry has expressed the hope "that our diplomatic relations with Cuba could encourage not only a greater dialogue with Venezuela, but also efforts to help Colombia put an end to 50 years of warfare." More in Spanish: (El Nacional; http://www.el-nacional.com/

 

Shannon: Venezuela-US dialogue was Maduro's initiative

US State Department of State Counselor, Thomas Shannon, has said that the dialogue between the US and Venezuela began at President Nicolás Maduro's request, and described the situation of talks as "hopeful," but noted that they are were just beginning. (El Universal, http://www.eluniversal.com/nacional-y-politica/150722/shannon-venezuela-us-dialogue-was-maduros-initiative)

 

Spanish senators to visit Mayor Ledezma

Spanish senators Dionisio García Carnero (PP), Ander Gil (PSOE), Iñaki Anasagasti (PNV), and Josep Maldonado Gil (CiU), have arrived here on a human rights mission at the invitation of the opposition umbrella group Unified Democratic Conference (MUD). They were met by María Corina Machado, the leader of political movement Vente Venezuela who was recently disqualified to run for Congress, as well as Mitzy Capriles de Ledezma and Lilian Tintori, the wives of detained opponents Antonio Ledezma and Leopoldo López. The legislators met with Caracas Metropolitan Mayor Antonio Ledezma, who is under house arrest, and will try to meet with the other political prisoners. (El Universal, http://www.eluniversal.com/nacional-y-politica/150722/spanish-senators-to-visit-mayor-ledezma)

 

UN welcomes Venezuela's human rights plan

The representative of the United Nations Development Program (UNDP), Niky Fabiancic, welcomed the decision of the Venezuelan government to prepare a draft Human Rights National Program, which he called "a great opportunity, as a call to peace, to dialogue," and invited the Venezuelan people to take part in that effort and make their comments and suggestions. (El Universal, http://www.eluniversal.com/nacional-y-politica/150722/un-welcomes-venezuelas-human-rights-plan)

 

Venezuelan National Assembly deplores Spain's "gag law"

The Venezuelan National Assembly passed a draft agreement rejecting a new Spanish Citizen Security Law, labeled by its opponents as "gag law" and in force since July 1. The bill was passed with only the votes of the pro-government majority. (El Universal, http://www.eluniversal.com/nacional-y-politica/150722/venezuelan-national-assembly-deplores-spanish-gag-law)

 

Venezuela arrests 2 military officers for drug trafficking

Two retired Venezuelan military officers sought on drug trafficking charges have been arrested, authorities announced. An anti-narcotics task force arrested former National Guard Capt. Vassyly Villarroel Ramirez, according to a statement released by the Interior Ministry. Ramirez has long been a wanted man. He was named in an Interpol alert and was classified as a drug kingpin in 2013 by the U.S. Treasury Department. U.S. officials say he has ties to Mexican and Colombian cartels and has been involved with cocaine trafficking. The task force also arrested former National Guard Lt. Robert Alexander Pinto Gil. The ministry accuses him of leading local drug trafficking gangs. He previously escaped from prison. National Guard commander Nestor Reverol said Tuesday that the two will be brought before the courts soon. (New York Times, http://www.nytimes.com/aponline/2015/07/21/world/americas/ap-lt-venezuela-drug-arrests.html?ref=americas&utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=New%20Campaign&_r=0)

 

 

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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