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, October 6, 2015

October 06, 2015


International Trade

Cargo that has arrived at Puerto Cabello

  • 150 containers of milk, beef, refined oil and drugs for Corporación de Alimentos y Suministros Agrícolas (CASA) and Fundación Misión Barrio Adentro.
More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=33841)

 

Cargo that has arrived at Bolipuertos Maracaibo

  • 30,000 tons of soybean cakes from Argentina for Corporación de Abastecimiento y Servicios Agrícolas (CASA)
  • 3 containers bearing electric generators for state agency Corporación Venezolana de Alimentos (CVAL)
  • 4 containers bearing machinery for different state agencies, including Petróleos de Venezuela S.A (PDVSA), BARIVEN; AGROPATRIA and Corporación de Abastecimiento y Suministros Agrícolas (CASA).  
  • 18 containers bearing 2,400 tires for state agency Suministros Venezolanos Industriales C.A. (SUVINCA)
  • 24 motorboats from the US for state oil company Petróleos de Venezuela (PDVSA)
More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=33842; http://www.bolipuertos.gob.ve/noticia.aspx?id=33839; http://www.bolipuertos.gob.ve/noticia.aspx?id=33840; Notitarde, http://www.notitarde.com/La-Costa/Llega-a-Bolipuertos-generadores-electricos-maquinarias-y-neumaticos/2015/10/01/652620/; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/llega-a-puerto-cabello-cargamento-con-2-400-caucho.aspx)

 

Government reports Venezuela’s non-petroleum exports hit US$ 4.2 billion

Venezuela’s non-petroleum exports total US$ 4.2 billion so far this year, with the figure expected to rise on year-end sales, the official AVN news agency reported. “We’re expecting a large amount of exports for the end of the year, as is normal in terms of trade in any nation. We believe we’re going to have very new (sic) export figures this year,” says Trade Minister Isabel Delgado, who claims non-petroleum exports cover products manufactured “by productive units of the state,” but also those produced by “small- and mid-sized private industries” that sell cocoa, flowers, medicines, shrimp and chocolate. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2397590&CategoryId=10717; El Universal, http://www.eluniversal.com/economia/151005/venezuelan-govt-ponders-new-exports-scheme)

 

 

Oil & Energy

 

Venezuela oil price continues slipping

After bouncing up US$ 6.50 in the first week of September, Venezuela's weekly oil basket price continued slipping for a fourth straight week as oil prices around the world moderated in a plentifully supplied market. 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 October 2 was US$ 40.02, down 49 cents from the previous week's US$ 40.51. According to Venezuelan government figures, the average price in 2015 for Venezuela's mix of heavy and medium crude is now US$ 47.60 for the year. Venezuela's average oil price for 2014 was US$ 88.42, down from 2013's US$ 98.08, 2012's US$ 103.42 and 2011's US$ 101.06, but higher than 2010's US$ 72.43, and much higher than 2009’s average price of US$ 57.01, which the current average is well below. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2397585&CategoryId=10717; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45713&idc=4)

 

PDVSA: Major refinery will be operational again this week

State-run oil company Petróleos de Venezuela (Pdvsa) expects to restore operations this week at all the units of the largest refinery in Venezuela, the Paraguaná Refining Compound (CRP), which was hit by a massive blackout last week.
Pdvsa said last Thursday it had started "gradual reactivation" of the refining complex, after a power failure hit the major refineries in the compound: Amuay and Cardón, with a capacity to process about 955,000 barrels per day.
(El Universal: http://www.eluniversal.com/nacional-y-politica/151005/pdvsa-major-refinery-will-be-operational-again-next-wednesday-thursday; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45700&idc=4)

 

 

Commodities

 

Tuna and sardines are simply not there

The can of tuna, formerly a fairly normal pantry staple, has long been missing from stores in Venezuela, especially the domestic brands. When tuna cans, imported or domestic, do occasionally show up on store shelves, prices have increased several fold. This also extends to other seafood products like sardines, formerly a popular item for people with low incomes. In 1998 industrial and artisanal (small scale) capture produced 513,585 tons of fish, covering the domestic market. This trend continued until 2004 (597,148 tons). But since 2005 production has gone into a downturn, falling to 226,591 tons in 2014. Production has contracted by nearly 60%. (El Universal, http://www.eluniversal.com/economia/151003/tuna-and-sardines-are-simply-not-there)

 

 

Economy & Finance

 

Venezuelan government filed an incomplete report with the SEC

The annual report filed by the Venezuelan government before the US Security Exchange Commission (SEC) did not include the definite figures on the country’s economic behavior in 2014. It only provided information up to the third quarter when the gross domestic product (GDP) posted a 4% drop in nine months. Allegedly, following direct orders from Nicolás Maduro, the Venezuelan Central Bank (BCV) was banned from publishing figures since the end of last year. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45698&idc=2; and more in Spanish: (El Nacional; http://www.el-nacional.com/)

 

ECLAC forecasts 6.7% downturn in Venezuela

The Economic Commission for Latin America and the Caribbean (ECLAC) released a report including corrected growth projections showing a downward trend compared to estimates presented in July. According to the commission, the region will grow only 0.5% on average in 2015, mostly due to deceleration in South America. It estimates Venezuela's contraction next year at close to 7%. "Growth projections indicate that South American economies -specialized in the production of primary goods, especially oil and minerals- and with a growing level of trade integration with China, will register the biggest deceleration," ECLAC pointed out. (El Universal, http://www.eluniversal.com/economia/151005/eclac-forecasts-67-downturn-in-venezuela; and more in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/cepal-estima-que-economia-venezolana-caera-6-7--es.aspx#ixzz3nmVxxGoE; El Nacional; http://www.el-nacional.com/)

 

 CENCOEX has paid out 35% of the dollars allocated in the bid held for the transport sector, says Surface Transport and Public Works Minister José Luis Bernardo. The auction was called last June 15 for US$ 350 million and 239 firms were allocated dollars. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45709&idc=2)

 

 

Politics and International Affairs

 

Venezuela’s legislative elections: Muddled, yet united

Some of its leaders are in jail. Others are banned from running for office. All are up against an autocratic government with formidable resources. Yet in legislative elections scheduled for December 6th, Venezuela’s opposition has its best chance of winning a national victory since 1998. Recent polls find that 70% of respondents expressing a preference will vote for opponents of the Socialist government led by Nicolás Maduro. The prospective winner, the Democratic Unity (MUD) alliance houses ideologies from Marxism to free-market conservatism, united only by a shared loathing of the government. Its electoral program consists primarily of the incontestable, but deliberately vague, proposition that Venezuela “wants change”. The alliance has demonstrated impressive flexibility and stoic discipline in the lead-up to the election. It has persuaded its members to bury their differences and field a single opposition candidate for each seat. It has yet to offer a manifesto for reform of Venezuela’s dysfunctional economy or hollowed-out state institutions, and its candidates defend their lack of concrete proposals by stressing that they are battling a system. Luis Vicente León, a pollster, believes that losing the National Assembly—even by a single seat—would devastate the Socialists by shattering their illusion of invincibility. But thanks to Venezuela’s complex semi-proportional electoral system, compounded by flagrant gerrymandering under both Chávez and Maduro, the MUD will need far more than a simple majority of votes to win control. Nonetheless, if the polls hold up and prove accurate, then in the absence of any electoral fraud the alliance’s current lead of over 20% should prove sufficient. Even without the two-thirds minimum for constitutional changes, a majority could enable the opposition to schedule a recall referendum against Maduro next year. Optimists hope that losing the legislature will lead moderate chavistas to oust the president and start cleaning up the mess that their movement’s namesake left behind. But that would require Maduro’s exit, and no one knows how far he will go to prevent a MUD victory. A last-ditch tactic might be to delay the vote, under the pretext of a manufactured crisis like Venezuela’s border disputes with Colombia or Guyana. Even if the coalition does prevail, it could take street protests and foreign pressure to make Maduro relent. (The Economist, http://www.economist.com/news/americas/21669929-voters-are-eager-end-chavismo-can-disciplined-diverse-opposition-coalition?frsc=dg%7Ca)

 

Venezuela hits back at U.S. for questioning its democracy

Venezuela's foreign minister has blasted her U.S. counterpart John Kerry for questioning the country's democratic credentials ahead of legislative elections the ruling socialists are forecast to lose. The spat follows a nascent rapprochement earlier this year between the two ideologically-opposed nations. In an interview, Kerry described Venezuela as "troubled" and said December's elections would be a "measure of the type of democracy that exists in the country." Responding on Twitter, Delcy Rodriguez said Venezuela rejected Kerry's comments. "The electoral register in the United States is founded on discrimination... Our political system is founded on democracy." On Sunday, President Nicolas Maduro said President Barack Obama was delaying consent for his proposed new ambassador in Washington. Maduro also said that current US diplomats in Caracas "are worse" than those expelled last June, and "are actively conspiring, like crazy". ((Reuters: http://news.yahoo.com/venezuela-hits-back-u-questioning-democracy-035820758.html; http://www.reuters.com/article/2015/10/04/us-venezuela-usa-idUSKCN0RY0US20151004; and more in Spanish: Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/canciller-rechaza-declaraciones-de-kerry-sobre-dem.aspx#ixzz3nmQnEeQ8; AVN; http://www.avn.info.ve/node/323229)

 

Colombian and Venezuelan Defense ministers met, border to remain closed

Colombian and Venezuelan Defense ministers met in Santa Marta in Colombia this Friday. After the meeting, Venezuela’s Minister Major General Vladimir Padrino said Nicolás Maduro could be making new announcements and Colombia’s Minister Luis Carlos Villegas thanked Venezuelan authorities to let them know about the measures beforehand. At the same time, Táchira state governor Lieutenant José Vielma Mora said the border will remain closed until the Colombian government nullifies its Resolution 08, which allows exchange houses in the border area. He said only 12 exchange houses are authorized by Colombia's Central Bank, and another 3,400 operate illegally in the area. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45711&idc=1; and more in Spanish: Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/frontera-con-colombia-desde-tachira-permanecera-ce.aspx#ixzz3nmS8EefZ)

 

Venezuela assumed the Presidency of the OAS’ Security Council to “restructure” the Pan American institution, claimed Foreign Affairs Minister Delcy Rodríguez in her Twitter account. The objective is doubtful considering Venezuela’s mandate will last only three months until next December 31. She also announced Bernardo Álvarez was appointed Venezuela’s Ambassador to the Organization of American States (OAS), in place of Roy Chaderton. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45699&idc=1; http://www.veneconomy.com/site/index.asp?ids=44&idt=45714&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/151005/bernardo-alvarez-appointed-new-venezuelan-representative-to-the-oas)

 

Venezuela and Guyana appoint ambassadors, restore relations

The Ministry of Foreign Affairs announced that Venezuelan ambassador Reyna Arratia would return to Guyana, following agreements signed between Presidents Nicolás Maduro (Venezuela) and David Granger (Guyana) in a meeting held on September 27 with United Nations (UN) Secretary General Ban Ki-moon. Venezuela also authorized Guyana's designated ambassador to Caracas, whose identity has not been revealed. (El Universal, http://www.eluniversal.com/nacional-y-politica/151005/venezuela-and-guyana-appoint-ambassadors-restore-relation)

 

Survey shows Venezuelans believe government is involved in organized crime

A Venezuelan survey indicates a growing percentage of Venezuela's population thinks state institutions are carrying out and facilitating organized crime activities. The joint survey by the Venezuelan Observatory of Violence (known by its Spanish acronym OVV), the Observatory on Organized Crime, and the Laboratory on Social Sciences (LACSO) suggests a large percentage of Venezuelans believe the security forces are involved in arms and drug trafficking.  Polling 3,500 individuals from seven Venezuelan states, the survey found 66% of Venezuelans believe that the police and military sell weapons to organized crime groups. Meanwhile, 62% of respondents said they think drug traffickers include corrupted elements of the military, up from 52% in 2013. Venezuelans are also likely to believe the government is facilitating organized crime and corruption in less direct ways. Between 63-72% of respondents said the government's economic policies have enabled corruption, the black market for currency exchange, contraband gasoline smuggling, and the smuggling of basic goods to flourish.  The perceived strengthening of organized crime groups appears to be having a significant impact on citizen security. 76% of respondents feel more insecure than they did 12 months ago, while just 6% say they feel safer. Fully half of all the respondents believe it is "easy" to get someone killed in their neighborhood, up from 35% in 2013. According to the OVV, Venezuela registered a homicide rate of 82 per 100,000 in 2014, the highest murder count since at least 1998. Furthermore, the survey indicates Venezuelans have few remaining doubts about the active role state institutions play in the country's underworld. A shadowy network of corrupt military officials, known as the Cartel of the Suns, is believed to be deeply involved in international cocaine trafficking. (Insight Crime, http://www.insightcrime.org/news-analysis/venezuela-citizens-believe-govt-involved-in-organized-crime-survey?utm_source=Master+List&utm_campaign=3e9fa08834-10_02_159_30_2015&utm_medium=email&utm_term=0_e90c5425f9-3e9fa08834-206744441)

 

Pope Francis urges Venezuela's bishops to promote dialogue

During his third meeting with Venezuelan bishops since his election, Pope Francis urged them to insist on seeking dialogue between the regime, the opposition and other social groups, in a move toward reconciliation. He called it a "pastoral priority". More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/151002/papa-pidio-a-los-obispos-venezolanos-fomentar-el-dialogo; 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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