Cargo that has arrived in Puerto Cabello:
- Over 3,160 tons of green coffee in 147 containers from Colombia, for state agency CASA.
- Over 2,115 tons of milk in 86 vans, also for CASA.
- Over 473 tons of beef in 16 containers from Colombia.
- Over 147 tons of vegetable oil in 6 containers from Nicaragua, for CASA.
More in Spanish: (NOTITARDE; http://www.notitarde.com/La-Costa/Mas-de-5-mil-toneladas-de-alimentos-llegaron-para-Casa-2472978/2015/07/31/569049)
Uruguay and Venezuela to barter food for oil
The government of Uruguay confirmed it would export 235,000 tons of food to Venezuela in exchange for oil, as an alternative to settle the debt of Uruguayan state-owned oil company ANCAP and to stock the Venezuelan food market. Uruguay´s Presidency reports that the food volume was negotiated in a recent "public-private" visit by Uruguayan business sector representatives to the Venezuelan government. The agreement provides for imports of "90,000 tons of rice, 44,000 tons of powdered milk, 9,000 tons of chicken, 12,000 tons of cheese, and 80,000 tons of soy." (El Universal, http://www.eluniversal.com/economia/150731/uruguay-to-sell-rice-powdered-milk-chicken-and-cheese-to-venezuela)
Imports may relieve scarcities by 20%
The Venezuelan government will receive some US$ 38 billion from oil sales this year, and US$ 28 billion will be assigned to imports - a reduction of 33% from 2014. Of these funds, some US$ 4 billion were used to import food and personal care products, which may help fill store shelves for the next 3 months and improve supply by 20% in public and private distribution networks. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Importaciones-bienes-solo-mejoraran-abastecimiento_0_675532579.html)
Oil & Energy
Oil prices continue dropping fast
West Texas indicator prices were down to US$ 45.74 per barrel yesterday, a 2.93% drop from the previous day. Brent indicators dropped even further to US$ 50.13 per barrel, a loss of 3.98% in the same period. Venezuela's oil export basket price has dropped around US$ 11 per barrel over the past two months. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2393577&CategoryId=10717; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44888&idc=4; El Universal, http://www.eluniversal.com/economia/150731/venezuelan-crude-oil-keeps-on-falling-hits-usd-4587; and more in Spanish: (El Universal; http://www.eluniversal.com/economia/150804/que-esta-pasando; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/industria/petroleo-se-desplomo-por-relentizacion-de-economia.aspx; http://www.elmundo.com.ve/noticias/petroleo/pdvsa/crudo-venezolano-sigue-a-la-baja-y-cierra-la-seman.aspx)
First shipment from offshore gas field reaches Venezuela
The first shipment to onshore facilities has been made from the offshore gas field discovered in 2009 in the Gulf of Venezuela by Spain’s REPSOL and Italy’s ENI. The gas is being produced at the Cardon IV block, located 50 kilometers (31 miles) offshore, which is part of the Rafael Urdaneta Project. The block has proven gas reserves of 17 trillion cubic feet (TCF). The operating license for the gas field is held by the Cardon IV-SA joint venture, in which state-owned oil giant Petroleos de Venezuela’s PDVSA Gas unit has a 50% stake and REPSOL and ENI hold the remaining 50% interest. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2393607&CategoryId=10717)
PDVSA announces new investments in Guayana region
The President of state-run oil company Petróleos de Venezuela (Pdvsa), Eulogio Del Pino, announced several plans for the development of the southern Guayana region. Agreements worth VEB 796 million (US$ 125.36 million calculated at the official foreign exchange rate of USD 6.30 per dollar) were signed, plus a component amounting to US$ 16 million to adjudicate contracts to local two companies and three metal mechanic consortiums which are to provide equipment and accessories required for oil production. (El Universal, http://www.eluniversal.com/economia/150731/oil-giant-pdvsa-announces-new-investments-in-guayana-region)
Government seizes NESTLE, POLAR warehouse to build housing
Venezuelan soldiers seized a food distribution center rented by companies including NESTLE, PEPSICO and POLAR in Caracas as the government looks to boost support ahead of elections. The companies were given two months to remove equipment and stock at the La Yaguara industrial park, which will be converted to social housing, workers said. Several dozen workers of POLAR, the largest Venezuelan food company, remain on the premises in protest against the expropriation. President Nicolas Maduro in recent months has stepped up attacks on the private sector, which he accuses of profiteering and sabotage, as his popularity wanes ahead of the Dec. 6 congressional elections. The government had first notified the landlord of plans to expropriate the industrial park in 2013. NESTLE used the facility to dispatch about 10% of its products in the country, supplying sweets and drinks to the western side of Greater Caracas. The La Yaguara industrial park is also being used by U.S. grain trader CARGILL, Mexican bottler COCA-COLA FEMSA and industrial gases supplier PRAXAIR. (Bloomberg, http://www.bloomberg.com/news/articles/2015-07-30/venezuela-seizes-nestle-polar-warehouse-as-food-shortages-mount)
Metallurgic companies operating at 30% capacity
Miguel Eseverri, head of Venezuela's Mining and Metallurgic Industry Association, reports companies in that area are operating at 30% capacity due to lack of supplies which are all provided by government operated Guayana basic industries where production has dropped steadily over the past years. They cannot import supplies because they lack FOREX. More in Spanish: (El Nacional; http://www.el-nacional.com/)
Economy & Finance
FOREX woes hit major multinationals operating in Venezuela
Venezuela's currency woes cut nearly US$ 3 billion in profit at United States blue-chip companies during the second quarter and prompted PROCTER & GAMBLE to remove its operations in Venezuela from its consolidated financial reports. More so-called deconsolidation moves and exits from Venezuela are likely to happen during the second half of the year as US corporations grow increasingly frustrated with Venezuela's sinking Bolivar (VEB) currency, according to analysts and US regulatory filings. Deconsolidating Venezuelan operations means that business can largely no longer hurt or benefit a US parent company's financial results. Often companies are taking a big one-time charge so that they can ring-fence what is left in Venezuela. COLGATE-PALMOLIVE and GOODYEAR have said they could follow suit if economic conditions here grow worse. MATTEL says it could cease Venezuela operations entirely if instability increases. An Ernst & Young reports indicates companies could have further difficulties in accessing government held FOREX. The MERCK pharmaceutical company reported a drop of US$ 715 million in Q2 earnings after it revalued assets here, but PROCTER & GABLE took a greater, US$ 2.1 billion hit due to difficulties in access FOREX for dividend repatriation. (El Universal, http://www.eluniversal.com/economia/150731/forex-hurdles-hit-large-us-companies-operating-in-venezuela; and more in Spanish: Infolatam: http://www.infolatam.com/2015/08/02/problemas-cambiarios-en-venezuela-golpean-a-grandes-empresas-de-estados-unidos/)
China-Venezuela Fund has been replenished to develop projects
Economic Affairs Vice President General Rodolfo Marco Torres reports that Venezuela has received US$ 5 billion as part of a second renewal of the Joint China Venezuela Fund earmarked for developing important projects here. The general emphasized that this step "shows the trust between the two governments to further strategic associations". More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/fondo-chino-venezolano-se-renueva-para-impulsar-ob.aspx#ixzz3hkJi6C1O; AVN; http://www.avn.info.ve/contenido/fondo-chino-venezolano-se-renueva-5000-millones-para-impulsar-obras-pa%C3%ADs)
International reserves up slightly due to Jamaica oil debt selloff
International reserves rose slightly to US$ 16.630 billion due to an influx of US$ 1.230 billion as a result of a discounted oil debt repurchase by Jamaica. Economic Affairs Vice President and Finance Minister General Rodolfo Marco Torres claims that China Fund replenishment of US$ 5 billion could also increase total reserves in the next few days. More in Spanish: (El Universal, http://www.eluniversal.com/economia/150804/que-esta-pasando; El Nacional; http://www.el-nacional.com/)
Former CADIVI head says "We lack reserves to meet the economic crisis"
Former Captain Edgar Hernández Behrens who headed CADIVI, BANFOANDES and was Banking Superintendent under the late President Hugo Chavez, says "we did not manage FOREX adequately while funds were plentiful. Crisis are cyclical and most countries establish reserves. This is who the Macroeconomic Stabilization Fund was created, but it has no FOREX now. We have no reserves, at all." He adds that corruption is at the root of the crisis. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/reservas-crisis-economica_0_676132597.html)
Politics and International Affairs
Death during lootings stirs growing concern, opposition calls nationwide protest
The death of a young man in the midst of looting at a food store in Southeast Venezuela has stirred growing concerns over the economic crisis and lack of public safety nationwide. The opposition Democratic Unity Conference (MUD) is calling for a "day of national protest against hunger and crime, and for freedom" on August 8th to take place in Caracas and the 24 state capitals. MUD Secretary General Jesús Torrealba says that at that time the group will present a number of proposals it demands should be undertaken immediately "to face the crisis created by government corruption and ineptitude with common sense, and not with bullets." The regime claims the looting was "planned" and carried out by "the battered right" on orders from the United States. An opposition communiqué retorted that recent lootings were carried out by "citizens desperate due to hunger and scarcity". (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2393600&CategoryId=10718; and more in Spanish: Infolatam , http://www.infolatam.com/2015/08/02/muerte-en-saqueo-en-venezuela-aviva-criticas-por-efectos-de-crisis-nacional/)
Maduro regime Venezuela blocks opposition leader from running
Venezuela's first lady will run for congress while an opposition leader has been formally barred from the contest. Election officials rejected former congresswoman Maria Corina Machado's attempt to register as a candidate for congressional elections Dec. 6. Hours later, President Nicolas Maduro announced that his wife, Cilia Flores, would be running for a seat. Machado, an opposition leader, called the National Elections Council's rejection of her candidacy a grotesque violation of her rights and the rights of all Venezuelans, and introduced a substitute candidate for the seat she had hoped to win: 70 year-old Caracas sociology professor Isabel Pereira. The opposition coalition says the government is attempting to clamp down on its candidates out of desperation, and leaders have called for nationwide protests Saturday. Flores was formerly the head of the National Assembly, and also served as Venezuela's attorney general. (Associated Press, https://uk.news.yahoo.com/venezuela-prevents-opposition-leader-running-182547147.html#oVUJ6TM)
Opposition needs 98 women; PSUV, 85, to meet electoral gender quotas
The gender quota for the December 6 parliament vote established by the National Electoral Council (CNE) will only be mandatory for constituencies where primary elections were not held and in for candidate lists per state. The Operations Manual prepared by the Council provides that nominations shall have a parity of representation of 50% for each gender. In cases where it is not possible to have equal representation, each gender shall represent at least 40% and up to 60%. (El Universal, http://www.eluniversal.com/nacional-y-politica/150801/opposition-needs-98-women-psuv-85-to-meet-electoral-gender-quotas)
Guyana open to dialogue with Venezuela over border dispute
Guyanese President David Granger is open to talks with Venezuelan counterpart Nicolas Maduro on the neighbors’ long-running border dispute, says Guyana’s foreign minister. “There is room for discussion in an appropriate forum and if that is in the margins of the UN (United Nations) or anywhere else then that’s not a problem,” said Carl Greenidge said in a news briefing. There is no concrete proposal for a meeting, he said. “We are not meeting one-on-one. There is no proposal to meet one-on-one and I don’t know what would be the objective of such a one-on-one,” Greenidge said. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2393573&CategoryId=10717)
Obama charm offensive targets Venezuela after Iranians, Cubans
The Obama administration’s charm offensive with unfriendly states has rolled through Myanmar, Iran and Cuba. Next stop: Venezuela. Just months after the administration declared Venezuela a threat to U.S. national security, it is working to improve relations, driven by concern that upheaval there could destabilize the region. State Department officers have been meeting quietly with officials in the leftist government of President Nicolas Maduro since April to develop what Secretary of State John Kerry has called “a normal relationship.” The outreach is another test of President Barack Obama’s 2009 inaugural pledge to “extend a hand” to repressive and corrupt regimes if they are “willing to unclench” their fists. (Latin American Herald Tribune, http://www.bloomberg.com/news/articles/2015-08-03/obama-charm-offensive-targets-venezuela-after-iranians-cubans)
INTERNATIONAL CRISIS GROUP: Venezuela: Unnatural Disaster
The accelerating deterioration of Venezuela’s political crisis is cause for growing concern. With legislative elections due in December, there are fears of renewed violence. But there is a less widely appreciated side of the drama. A sharp fall in real incomes, major shortages of essential foods, medicines and other basic goods and breakdown of the health service are elements of a looming social crisis. If not tackled decisively and soon, it will become a humanitarian disaster with a seismic impact on domestic politics and society, and on Venezuela’s neighbors. This situation results from poor policy choices, incompetence and corruption; however, its gravest consequences can still be avoided. This will not happen unless the political deadlock is overcome and a fresh consensus forged, which in turn requires strong engagement of foreign governments and multilateral bodies. Failure to do so would leave Venezuela as a long-term source of instability in the region. Adherence to the widely accepted principle of non-interference must not continue to be used as a pretext for lack of active and positive involvement in a crisis that threatens to become a tragedy. SEE FULL REPORT: (International Crisis Group, http://www.crisisgroup.org/~/media/Files/latin-america/venezuela/b033-venezuela-unnatural-disaster.pdf?utm_campaign=website&utm_source=sendgrid.com&utm_medium=email)
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.