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, August 13, 2015

August 13, 2015


International Trade

 

10,000 steer have arrived at Guanta port

Ten thousand heads of cattle from Brazil have arrived at Guanta port for the government Food Corporation (CEVAL). More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=25672)

 
 

Logistics & Transport

 
Truckers are refusing to carry price controlled products due to lootings

Truckers are refusing to carry price controlled products out of fear of lootings, after constant thefts they must undergo: an average 4 cases per week. Giovanni Lupi, President of the Central Venezuela Transportation Chamber, reports that it is usual for trucks stuck in traffic to be assaulted and looted. The problem now ranks ahead of lack of spare parts among obstacles to be overcome. Trucks are now not circulating between 7 PM and 6 AM and must hire escorts to get drivers to carry price controlled products. Spare part costs have increased by 300%, which translates in to 40% of the entire cargo fleet being paralyzed. More in Spanish: (El Carabobeño, http://www.el-carabobeno.com/portada/articulo/110497/transportistas-no-quieren-llevar-productos-regulados-por-temor-a-saqueo)

 

Cargo freightage cost to increase 200%

José Petit, of the Association of Small Business and Drivers of Container Cargo at Puerto Cabello (ASOTRACONTAINER) reports that the group has decided to increase cargo freightage from the port to other cities by 200% starting August 18th, due to the cost increases for spare parts and services. More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Precios-de-fletes-de-cargas-aumentaran-200-2480565/2015/08/11/583815/)

 

 

Oil & Energy

 
Venezuela says pushing for OPEC, Russia action to stem oil fall

Cash-strapped Venezuela is pushing for an emergency OPEC meeting and joint coordination with Russia to stem a tumble in oil prices, says President Nicolas Maduro. "We're working towards a special OPEC meeting, in coming days we'll announce .... We're making contacts with OPEC governments," he said - and added "We're evaluating the possibility that a very high ranking OPEC meeting be called, and that in coordination with the Russian Federation, President Vladimir Putin, we can advance in taking a series of actions to defend the oil market in the face of this latest fall". (Reuters, http://www.reuters.com/article/2015/08/12/opec-venezuela-idUSL1N10N02620150812; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45031&idc=4)

 

Crude oil exports expected to drop by US$ 4.9 billion

ODH CONSULTORES warns that oil exports could shrink by US$ 4.9 during the second semester this year due to the drop in prices. It says that if the average price is US$ 43.15 per barrel and if one assumes volume will remain the same, total sales would be US$ 41.5 billion. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 
 

Commodities

 
HEINZ ketchup and baby food plants have stopped operations due to lack of raw materials in the latter and to maintenance in the former. A spokesman from the plant’s workers confirmed the plant located in San Joaquín in Carabobo state has been paralyzed for a week. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45028&idc=3)

 

COLGATE PALMOLIVE has also stopped one of its plants

Colgate informed its workers in the Valencia plant -via an internal memorandum- its detergent production line will be stopped indefinitely as of August 10 due to shortages of raw material for packaging. Workers of four of the six production lines at this plant will be relocated to the company’s other lines. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45029&idc=3)

 

Auto and motorcycle assembly at a standstill in Venezuela

The automobile sector in Venezuela continued to be hit by lack of FOREX as a consequence of dwindling oil prices.
The motorcycle sector has not been allocated the foreign currency it requires to import the CKD, a kit with the assembly materials for each unit. Overall production in July declined to 412 units from June, when 1,446 motorcycles were assembled, according to figures from the Association of Motorcycle Industrials, Manufacturers, and Assemblers (AIFEM). Moreover, the sector accrues a US$ 812 million debt to their Chinese suppliers, so credit lines are frozen for the time being.
(El Universal, http://www.eluniversal.com/economia/150812/car-and-motorcycle-assembly-at-a-standstill-in-venezuela)

 

Beer maker Polar restarts brewing after shortages

Venezuela's largest beer manufacturer says it will restart operations after shortages of raw materials led it to close some breweries. Cerveceria Polar has announced that it's received the malted barley it needs to manufacture the golden brew that is a favorite here. The company makes more than 70% of Venezuela's beer. Last week, bottles of Polar began to disappear from store shelves in Caracas due to difficulty obtaining ingredients. (Associated Press, http://news.yahoo.com/venezuela-beer-maker-polar-restarts-brewing-shortages-185759591.html)

 

 

Economy & Finance

 
Central Bank of Venezuela has failed to release figures for seven months

The Central Bank of Venezuela (BCV) has not published official data on inflation (national consumer price index), Gross Domestic Product (GDP), and shortage of products in the past seven months. This means the BCV has been breaking its own law, which provides that official economic figures must be published within the first days of each month. Recently, the Supreme Tribunal of Justice (TSJ) dismissed a lawsuit brought against the President of the BCV, Nelson Merentes, by NGO Transparencia Venezuela urging him to publish official figures. (El Universal, http://www.eluniversal.com/economia/150811/central-bank-of-venezuela-fails-to-release-figures-for-seven-months)

 

Venezuela holds the largest gold reserves in Latin America

Venezuela tops the list of Latin American countries with the largest gold reserves, according to the latest report issued by the World Gold Council, headquartered in London. The ranking shows that the United States holds the largest gold reserves in the world, with 8,133.5 tons. Venezuela holds 361 tons of gold, which represent 68% of its reserves. The country ranks 16 worldwide, despite the fact that its gold reserves declined from 367.6 tons in June. The price of gold stands at its lowest level since February 2010, at USD 1,072.30 per ounce. (El Universal, http://www.eluniversal.com/economia/150811/venezuela-holds-the-largest-gold-reserves-in-latin-america)

 

Venezuela appeals for 2nd time to World Bank panel in Conoco dispute

Venezuela has appealed for a second time to the World Bank's arbitration panel against its decision in the country's dispute with ConocoPhillips, linked to the nationalization of the company's assets. In a partial ruling last year, the International Center for Settlement of Investment Disputes (ICSID) said that the 2007 takeover by late socialist leader Hugo Chavez of Conoco's oil projects was unlawful. On Tuesday, Venezuela's Attorney General's Office said it formally requested the previous day that ICSID "reconsider its position with respect to the ruling." The nation has requested various reviews of recent ICSID decisions, which critics see as attempts to stall the payment of fines. (Reuters, http://www.reuters.com/article/2015/08/11/venezuela-arbitration-conocophillips-idUSL1N10M2ES20150811)

 

CONINDUSTRIA: Reactivating industry can substitute imports

Venezuela's industrial sector hopes to present the government its proposal to oxygenate the economy and recover local production. The President of the Venezuelan Confederation of Industries (CONINDUSTRIA), Juan Pablo Olalquiaga, says a plan for import substitution requires urgent implementation of the five measures proposed by the industrial sector: securitization of the debt owed by industries to their suppliers, legalization of the parallel foreign exchange market towards a feasible scheme, lifting price controls, returning expropriated companies to the private sector, and establishing links between education and research centers and the companies. (El Universal, http://www.eluniversal.com/economia/150812/conindustria-reactivating-the-industry-will-substitute-imports)

 

 

Politics and International Affairs

 
Regime frees 2nd prominent opponent in just over 24 hours

A former Chavez defense minister turned staunch government critic was granted early release from jail, making him the second prominent opposition leader to be freed in little more than 24 hours. A military tribunal granted retired Gen. Raul Baduel parole after he completed six of a nearly 8-year sentence on corruption charges. A short video of Baduel embracing loved ones was tweeted by his daughter after he was discharged from the military prison outside Caracas, where he's been held alongside Venezuela's most-recognized jailed opponent, Leopoldo Lopez. Baduel's release comes just 24 hours after Daniel Ceballos, the former mayor of the restive western city of San Cristobal, was granted house arrest on medical grounds while awaiting trial for his alleged role in inciting violence during last year's anti-government protests. Combined, the two surprise releases could signal a greater leniency on the part of President Nicolas Maduro's socialist administration, which has come under sharp fire from the U.S. over the imprisonment of some 50 anti-government activists on what human rights groups say are trumped-up charges meant to silence dissent. Ceballos, hours after being reunited with his family, shouted a statement from a second floor window in Caracas, saying his surprise release represented a hopeful sign "that all political prisoners might be reunited with their families." (The New York Times: http://www.nytimes.com/aponline/2015/08/12/world/americas/ap-lt-venezuela-opposition-leader.htm; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2394338&CategoryId=10717; http://www.laht.com/article.asp?ArticleId=2394332&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/150811/court-grants-home-arrest-to-dissenter-daniel-ceballos)

 

Dissident legislative candidates emerge on both sides

The DELPHOS polling group indicates that some 40% of voters are bent toward a third voting option in the upcoming December 6th parliamentary elections, away from the MUD opposition coalition and pro-government forces, and dissidents could take votes away from both pro-regime candidates and those of the opposition.  Both the MUD coalition and the government's PSUV nominated 334 candidates and 3 representatives of the indigenous tribes for the 167 seats in the National Assembly (including main representatives and alternates), but independents have emerged on both sides. On the opposition splinter groups have emerged in both Lara and Mérida states. On the part of the "chavista" forces, dissident forces headed by Marea Socialista (Socialist Tide) have put forward 99 candidates, and there may be more. They say they will present candidates in 58% of the electoral districts. One "chavista" dissident, labor leader Marcela Máspero, says "Maduro accentuated corruption, political persecution and harassment of labor. Expropriation was a failure and the proof is that 95% of nationalized companies produce nothing". More in Spanish: (El Nacional: http://www.el-nacional.com/politica/Atomizacion-candidatos-signa-comicios_0_682132042.html)

 

US willing to improve relations with Venezuela

US Secretary of State John Kerry says the US is interested in a normal relationship with the Venezuelan government and is talking to Cuban authorities about the matter. He says he spoke to the Cuban regime about "the desire of Washington to increase chances for the Venezuelan people to be protected, respected and represented"; and added that he hopes Venezuela complies with OAS and Human Rights Committee standards on free elections and is accountable to the international community. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

US denies it is stirring chaos in Venezuela

The United States has denied that the Southern Command, in charge of military operations in Latin America, is plotting against the Venezuelan economy, as President Nicolás Maduro has denounced. A spokesperson for the US Southern Command, emphasized that the Command was neither fostering disturbances in Venezuela nor trying to dynamite the Venezuelan economy or its government. Maduro had claimed that a special committee had been created to produce evidence of an alleged destabilization plan led by the Southern Command he called "Plan Buitre" (Vulture Plan). (El Universal, http://www.eluniversal.com/nacional-y-politica/150812/us-denies-it-is-stirring-chaos-in-venezuela)

 

One out of every four Venezuelans would rather leave the country

A public opinion study by CONSULTORES 21 shows that one out of every 4 Venezuelans would rather leave for another country than stay in Venezuela. 36.4% of those between 18-24 years old would like to migrate. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 
 

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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