September 08, 2015

International Trade

 

Cargo that has arrived at Puerto Cabello:

• 514 containers bearing milk, butter, beef and chicken from Brazil, for state agency CASA
• 170 containers bearing supplies for agriculture and the oil industry, consigned to state agency BARIVEN
• Over 400 steel structures from China for building bridges here.

More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Arribaron-a-Puerto-Cabello-mas-de-400-toneladas-de-alimentos-desde-Cartagena/2015/09/01/617591/; http://www.notitarde.com/La-Costa/A-Puerto-Cabello-llegaron-mas-de-400-estructuras-de-acero-2496886/2015/09/03/620083/; Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=32740; http://www.bolipuertos.gob.ve/noticia.aspx?id=31741)

 

Forty-six products exempted from import tariffs

For at least one year, 46 products of mass consumption will be exempted from import tariffs in Venezuela under a joint resolution of the Ministry of Trade, Economy and Finances and the Ministry of Agriculture and Lands. Import tariff privileges have been granted through July 31, 2016. The ministries involved, along with the National Center for Foreign Trade (CENCOEX) and the National Center of Food Balance (CENBAL), may update the list of goods as provided in the resolution and if necessary. (El Universal, http://www.eluniversal.com/economia/150905/forty-six-products-to-have-tariff-benefits)

 

Imports from Colombia down 40.5% in July

According to Colombia's National Statistics Department (DANE), Colombian exports to Venezuela dropped 40.5% in July as compared to last year: Down to US$ 3.001 million from US$ 5.048 million More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/exportaciones-de-colombia-cayeron-40-5--en-julio.aspx#ixzz3l33BynHD)

 

Venezuela seizes US$1.5 million in oil equipment set to be smuggled to Colombia

Government sources say Venezuelan police seized two trucks loaded with US$ 1.5 million in oil equipment that was to be smuggled into neighboring Colombia. Tubes for oil extraction and production belonging to state-run oil company PDVSA were uncovered in the western state of Zulia, the country's traditional crude-producing area that sits at the contraband-rife border with Colombia. Police started investigating following a report there was a plan to steal equipment from PDVSA's Topomoro production area, the Zulia state government said in a statement at the weekend. (Reuters, http://www.reuters.com/article/2015/09/07/us-venezuela-oil-idUSKCN0R71PN20150907)

 

 

Oil & Energy

 

Russia, Venezuela did not reach agreement on supporting global oil prices

Russia and Venezuela did not reach agreement on measures to support global oil prices, Russian Energy Minister Alexander Novak told reporters on Friday. Russia and Venezuela need to combine efforts to lift oil prices, President Vladimir Putin told his Venezuelan counterpart Nicolas Maduro on Thursday, but refused to spell out any specific action, including output cuts. "No, consultations will go on," Novak said when asked how talks went and if any decision was taken. (Reuters, http://www.reuters.com/article/2015/09/04/us-russia-forum-oil-idUSKCN0R402U20150904; Bloomberg, http://www.bloomberg.com/news/videos/2015-09-04/russia-and-venezuela-address-oil-price-slump; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2395779&CategoryId=10717)

 

In Qatar, Maduro pushes for OPEC heads of state summit

President Nicolas Maduro has suggested to the Emir of Qatar a summit for heads of state of OPEC countries to defend oil prices, an idea he said the leader of the Arab Gulf state "liked". "I made the proposal, he liked the idea, he said he was in agreement with the idea, and as president of our organization for summits he will make the necessary consultations," Maduro said. Maduro met with the emir, Sheikh Tamim bin Hamad al-Thani during his visit to OPEC nation Qatar, and says he also suggested non-OPEC countries, which include Russia, take part. (Reuters, http://www.reuters.com/article/2015/09/05/us-venezuela-opec-qatar-idUSKCN0R50OA20150905)

 

Oil price slump will worsen next year once the US sanctions against Iran are completely lifted and its crude oil feeds the international market, according to internationalist Kenneth Ramírez. The drop could be as high as US$ 15/bbl., according to estimates by the US Department of Mining. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45357&idc=4)

 

After setting new low for 2015, Venezuela oil price bounces

After falling to a new low for the year the previous week, Venezuela's weekly oil basket price bounced hard as oil prices around the world rebounded from their lows. 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 September 4 was US$ 42.66, up US$ 6.50 from the previous week's US$ 36.48. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2395868&CategoryId=10717)

 

Venezuela loses US refinery as ConocoPhillips ICC award enforced in US Court

A U.S. Federal Court has upheld U.S. enforcement of an International Chamber of Commerce (ICC) arbitration agreeing that U.S. oil giant ConocoPhillips has the right to take Venezuela state oil company PDVSA's 50% stake in a delayed coking unit at the Sweeny refinery in Old Ocean, Texas. Venezuela now has 30 days to appeal. The 70,000 barrel-per-day coking unit was originally owned by Merey Sweeny LP, a joint venture between PDVSA and Phillips. When Venezuela failed to supply its contractually agreed amount of crude, ConocoPhillips announced it was exercising its right to buy out its deficient partner. "Because Venezuela had breached the contract by not supplying crude and also not contributing further investment to the venture, ConocoPhillips was able to take PDVSA's share of the refinery for literally zero - free -- as a result of the way the contract was written," says Russ Dallen, an international lawyer who follows Venezuela's cases as head of investment bank Caracas Capital Markets. "Venezuela's 50% stake in Sweeney was valued between US$ 352 million and US$ 540 million." ConocoPhillips is in several multibillion dollar suits against Venezuela and PDVSA, after President Hugo Chavez expropriated its investments and companies in Venezuela. ICSID found Venezuela liable for the expropriations without compensation in 2013 and is now arbitrating damages that are expected to be around US$ 5 billion. ConocoPhillips has also filed a contractual claim for losses from the expropriations before the ICC. That case is also ongoing.(Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2395952&CategoryId=10717)

 

PDVSA has US$ 3 billion to pay off its bonds and pay the 2015 PETROBONO, maturing in October, according to Barclays Capital. According to the firm, PDVSA’s strategy of repurchasing and withdrawing bonds maturing in the short-term from the international market has had a positive effect. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45370&idc=2)

 

PETROCARIBE has approved a 10-year development plan suggested by Venezuela, during its 10-year anniversary summit held in Jamaica this weekend. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45372&idc=4; El Universal, http://www.eluniversal.com/economia/150907/petrocaribe-approves-10-year-development-plan)

 

 

Commodities

 

Government debt to the automotive sector is US$ 3 billion, including debts from 2012, 2013 and 2014, according to the Nueva Esparta State’s Automobile Distributors’ Association’s (ADANE) head Gabriel Briceño. He pointed out the government has promised to pay off this debt but has repeatedly failed to do so. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45368&idc=3)

 

POLAR stopped its margarine plant in Carabobo due to lack of palm oil. The company’s management was forced to send workers home until a shipment from Ecuador arrives to continue operations. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45356&idc=3)

 

 

Economy & Finance

 

August inflation pegged at 8.9%

According to a source close to Venezuela's Central Bank, August inflation was 8.9%, year to date inflation is 106.5% and projected annual inflation is up to 150.4%. Food and non alcoholic beverages are reported to be registering the largest increases. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Inflacion-agosto-situo_0_697730442.html)

 

FORBES: Venezuela doesn't quite have hyperinflation yet but it's getting there

We have no strict official definition of hyperinflation but the usual rule of thumb is that an inflation rate of over 50% a month qualifies for the hyper- not just the inflation. And with estimates of Venezuela’s annual inflation rate running in the 700 to 800% sort of range the country’s not that far off the joy of joining Zimbabwe, post-WWII Hungary and Weimar Germany in the hall of shame. Hyperinflation isn’t so much when there’s too much money chasing the goods: it’s when the system flips over to the velocity of money circulation increasing that’s the identifying point. What we need there is that V change and change considerably. People see the inflation: people are not, contrary to rumor, in aggregate dumb. So, they see that money is going to be worth less in a month, or a week. So, they spend it now. On anything. Absolutely anything at all. So, if hyperinflation does appear then that’s the end for that particular currency, one way or the other. And Venezuela does appear to be on the verge of it: we’re just going to have to wait and see whether we get that change in V as people desperately buy anything at all with the paper currency they have at hand. (FORBES, http://www.forbes.com/sites/timworstall/2015/09/06/)  

 

Central Bank has placed US$ 3.4 billion in 2015

As a part of its policy aimed at lessening monetary liquidity, the Central Bank of Venezuela (BCV) has placed approximately US$ 3.4 billion in "Directo BCV" investment notes to date in 2015.
Based on its numbers, monetary liquidity or means of payment of the economy has expanded about 44.5%. As a result, at August 21, the balance stood at US$ 45.9 trillion, a hike of US$ 140 billion.
Expansion took place as international reserves, the main source of liquidity, plunged. (El Universal, http://www.eluniversal.com/economia/150905/venezuelan-central-bank-has-placed-usd-34-billion-in-2015)

 

 

Politics and International Affairs

 

Venezuela’s economy is in tatters — and its border crisis could destabilize the region

Less than four months before crucial elections that may make or break its legislative advantage, the government of President Nicolas Maduro has embarked on an effort to clamp down the country’s western border with Colombia. The ultimate consequences of the “state of emergency” imposed on western border areas remain unclear, but the country's current situation threatens the rattle the overall stability of the region, particularly that of Colombia. Maduro’s approval rating has slipped below 25%, and his efforts to crackdown on smuggling and direct popular frustration are likely meant to shift blame away from his government. Observers and members of Venezuela’s opposition have suggested Maduro is only stoking tensions to influence elections in December. There is also substantial evidence that Venezuelan military forces have worked with criminal gangs and other delinquent groups in drug trafficking and smuggling operations. Recent events indicate that international assistance is not forthcoming. Colombia has requested that the Organization of American States call a high-level summit on the issue — a request the OAS did not approve. And Colombian officials independent of the Santos administration have also called for Maduro to stand before the International Criminal Court. (Business Insider, http://www.businessinsider.com/venezuelas-border-crisis-2015-9)

 

Colombia's Santos accepts Uruguay as mediator for talks with Maduro, sets preconditions

Colombian President Juan Manuel Santos says he has accepted an offer from the President of Uruguay to be the mediator in the border conflict with Venezuela and facilitate a dialogue with President Nicolas Maduro. He says he suggested the meeting could take place in Montevideo if necessary. He added that "from the first day" when Venezuela ordered the border closed in Táchira state he tried "to talk to Maduro, but it was not possible". Santos had previously set three conditions to meet with Maduro: a) opening a humanitarian corridor so that over 2000 children across the border can attend school in Colombia. This appears to have been done. b) returning the belongings of over 11,000 Colombians that have been deported or left Venezuela voluntarily; and c) the Venezuelan government must "abide by minimum conventions and not mistreat Colombians who are being deported." Maduro had previously challenged Santos to not be afraid and talk "face to face"..."wherever, whenever and however he likes".  "Do not run away any more. Face me", he said, and added that Santos "does not want to talk" due to internal pressure. "This is my last call", he said. He says he wants to talk "without conditions", and has added "I am the one calling the shots here". (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45371&idc=1; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2395854&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/150907/venezuela-re-opens-border-crossing-for-colombian-workers; and more in Spanish: Infolatam, http://www.infolatam.com/2015/09/08/santos-acepta-mediacion-de-uruguay-para-dialogar-con-maduro/; http://www.infolatam.com/2015/09/03/santos-pone-tres-condiciones-para-reunirse-con-maduro/; http://www.infolatam.com/2015/09/07/maduro-llama-a-santos-a-no-tener-miedo-y-hablar-donde-cuando-y-como-quiera/;  AVN; http://www.avn.info.ve/contenido/venezuela-reitera-su-llamado-al-di%C3%A1logo-colombia-para-solventar-situaci%C3%B3n-fronteriza)

 

Maduro orders the border shut in Zulia state as well

President Nicolás Maduro has ordered Venezuela's border with Colombia to shut down at its other major pass, in the state of Zulia. At the same time he ordered 3,000 military into the area, to reinforce the decree at the last remaining open border post. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/ejecutivo-ordena-cierre-paso-fronterizo-paraguach%C3%B3n-estado-zulia; http://www.avn.info.ve/contenido/maduro-decreta-estado-excepci%C3%B3n-municipios-guajira-mara-y-almirante-padilla-zulia; El Universal, http://www.eluniversal.com/nacional-y-politica/150908/maduro-ordena-cierre-de-frontera-por-paraguachon; El Nacional, http://www.el-nacional.com/politica/Maduro-Guajira-Mara-Almirante-Padilla_0_697730487.html; http://www.el-nacional.com/politica/Maduro-migratorio-frontera-Colombia-Zulia_0_697730486.html)

 

OAS calls for joint efforts to settle border crisis

OAS Secretary General Luis Almagro visited the Colombian border city of Cúcuta, and urged the governments of Colombia and Venezuela to bring peace to the citizens through dialogue. Almagro asked Venezuela to urgently allow reunification of families split as a result of the border shutdown; and also to give Colombians who remain in Venezuela peace of mind through a message that "calms the anxiety they feel." (El Universal, http://www.eluniversal.com/nacional-y-politica/150907/oas-calls-for-joint-efforts-to-settle-border-crisis)

 

Pope sees "hope" for Colombia-Venezuela border spat as bishops meet

Pope Francis says a meeting between Colombian and Venezuelan bishops was a clear sign of hope in a border dispute that has seen some 16,000 Colombians leave their adopted home.  "The bishops of Venezuela and Colombia have met in recent days to analyze together the painful situation that has sprung up on the border between the two countries," the Argentine pontiff said. (Reuters, http://www.reuters.com/article/2015/09/06/venezuela-colombia-pope-idUSL5N11C0DN20150906; El Universal, http://www.eluniversal.com/nacional-y-politica/150907/pope-francis-calls-for-solidarity-in-venezuela-colombia-crisis)

 

Maduro names new ministers on Twitter from Qatar

President Nicolas Maduro took to Twitter to appoint new ministers after extending an international tour for “solid” oil prices to Qatar. Maduro, who arrived in Doha by surprise after traveling to Vietnam and China earlier this week, named Jesus Salazar as minister of the presidency, Clara Vidal as indigenous peoples minister, and Rodulfo Perez as education minister, among other appointments. Maduro said the appointments will allow the replaced ministers to focus on National Assembly elections set for December. (Bloomberg, http://www.bloomberg.com/news/articles/2015-09-04/venezuela-s-maduro-names-new-ministers-on-twitter-from-qatar-ie5tcfms)

 

Inter American Human Rights Court says Venezuela must restore RCTV frequency

The Inter American Human Rights Court has ordered the Venezuelan government to restore the frequency for Radio Caracas Television (RCTV), Channel 2, on the basis that the regime sought to "silence critical voices" when ordered the station shut down in May 2007. The Court found that the government here violated the rights to seek and receive information, of the company, its workers, and all Venezuelans. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150908/corte-idh-ordeno-al-gobierno-devolver-la-senal-a-rctv; El Nacional, http://www.el-nacional.com/politica/Corte-Interamericana-restablecer-concesion-RCTV_0_697730435.html)

 

Leopoldo Lopez's defense attorneys charge "serious mistakes" in trial against him

Defense attorneys for opposition leader Leopoldo López have charged "serious mistakes" and "lack of ethics" throughout the trial of their client, who has been jailed for over a year and a half for alleged links to violence and damages during an anti government protest in February 2014. The next hearing is scheduled for Thursday this week. More in Spanish: (Infolatam, http://www.infolatam.com/2015/09/07/defensa-de-leopoldo-lopez-denuncia-graves-vicios-en-juicio-en-su-contra/)

 

Maduro says Venezuela will receive 20.000 Syrian refugees, as a "peace gesture". More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/20-000-sirios-seran-recibidos-en-venezuela.aspx#ixzz3l8jDx514)

 

 

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.