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 20, 2015

October 20, 2015

International Trade


Cargo that has arrived at Puerto Cabello:

  • 30,000 metric tons of white corn from Panama for state agency CASA
  • 4,199 tons of beef; 3,000 tons of milk; 408 tons of black beans; 748 tons of margarine; and 3,485 tons of chicken, from Colombia and Argentina for state agency CASA.
More in Spanish: (Bolipuertos,;; Notitarde;; Ultimas Noticias,; AVN;; El Mundo,


Amid scarcities, imported food piles up at ports

Opposition National Assembly member Neidy Rosal has charged that amid current scarcities there are very worrisome reports of huge stockpiling of imported food that has not been distributed and is at risk of being damaged. She says "60% of the 134,000 tons of food imported in September have not left" the port, and another 152,000 tons of food have arrived in October. She demanded that experts be sent to verify the state of this merchandise in order to "avoid what happened in 2010, when 160,000 tons of food were lost. More in Spanish: (GRUPOSOLUCIONES,


New decline in Venezuela-Colombia trade is reported

Venezuela-Colombia trade shrank 48% in FY2015-Q3, compared with the same term in 2014, the Chamber of Venezuelan-Colombian Integration (CAVECOL) reported, noting that "trade between Venezuela and Colombia during the third quarter of 2015, has accrued the amount of US$ 281 million versus US$ 544 million in the same term of 2014." It also reported that in January-September 2015, bilateral trade ended 40% below the same term last year, down to US$ 954 million from US$ 1.59 billion. (El Universal,; Veneconomy,


CONSECOMERCIO: Imports have declined 50% from last year

The President of the National Trade and Services Council (CONSECOMERCIO), Cipriana Ramos, reports that imports are needed to fully stock the Venezuelan market, because local production has heavily declined. She says private traders are unable to import products because the government is not holding auction sales of foreign currency, and adds that

"The only products available in the market are the ones that they (the government) are importing, because there are no auction sales, we will not be able to import with the Ancillary Foreign Currency Administration System (Sicad I), and foreign currency is not being sold at the Foreign Exchange Marginal System (Simadi)." El Universal,



Oil & Energy


PDVSA’s cash flow deficit was US$19.4 billion n the first nine months of this year, compared to the same period in 2014, due to falling oil prices, according to BancTrust. The firm points out the Venezuelan State oil company’s deficit at the end of 2015 will be US$ 22.8 billion if oil prices do not recover. (Veneconomy,


Venezuela oil price falls after bounce

Venezuela's weekly oil basket price fell after a one week bounce as oil prices around the world moderated as markets appeared to be well supplied. 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 16 was US$ 41.49, down 68 cents from the previous week's US$ 42.17. (Latin American Herald Tribune,


Venezuela buys 25% percent stake in Antigua oil company

Venezuela has signed an agreement with the government of Antigua and Barbuda to buy a 25% stake in the West Indies Oil Company (WIOC), says Venezuela's state petroleum company (PDVSA), without providing financial details for the purchase of the stake in the refinery and distribution company owned by the government of the Caribbean island nation. Venezuela has been seeking greater storage space in the region. (Reuters,


Venezuela's Cardon catcracker to restart next week says PDVSA

The catalytic cracker at Venezuela's 310,000 barrel-per-day (bpd) Cardon refinery will be operating within a few days after being damaged in a power outage earlier this month, state oil company PDVSA said. A PDVSA statement said both Cardon and the adjacent 645,000 bpd Amuay refinery were working after the blackout. (Reuters,





Tuna production paralyzed, must be imported from Ecuador and Colombia

Members of the Fish Canning Industry Chamber (CAVENPESCA) are in a state of emergency since production has halted entirely due to lack of supplies, and say they since the end of 2014 they have not received import permits that could allow them access to FOREX. The industry requires 90,000 tons of whole tuna per year and domestic production was around 37,464 tons in 2014. The rest must be imported from Ecuador, Colombia and Costa Rica. More in Spanish: (El Nacional;


Economy & Finance


Foreign reserves fall to 12-year low as payments loom

Venezuela’s international reserves fell to a 12-year low of US$ 15.3 billion as the country faces payments on its dollar debt totaling US$ 4.5 billion in October and November. Reserves fell US$ 614 million on Oct. 16, the Central Bank said

on its website. That’s the lowest level since May 2003 and the biggest daily decline since June 3. The country and its state-owned oil company, Petroleos de Venezuela SA, have principal and interest payments of US$ 1.5 billion due this month and another US$ 3 billion in November.. The government will likely be able to pay its debt due this year, although there’s a 60% chance of default next year, Eurasia Group said in an en e-mailed note to clients. (Bloomberg,


BOFA expert says Venezuela has the means to honor foreign debt

Francisco Rodríguez, of Bank Of America-Merrill Lynch, says "Venezuela must not default on its foreign debt because it has the capacity to continue honoring its commitments". He says the cost of a default would be very high to the Venezuelan economy, adding that in the first place "Venezuelan foreign debt in the hands of non-government entities amounts to US$ 117 billion, which is 24% of GDP...if some very conservative adjustments are made on the exchange rate and other calculations, it could be 42% of GDP, which is not major when compared to other countries". BOFA sees potential for a political transition in Venezuela towards a friendlier regime with the market in a recent report in which analysts follow Latin American economies. However, they are cautious about the political risks associated with this scenario, and the fear of a messy transition that could have an effect on bond prices. (Veneconomy,; and more in Spanish: El Universal,


Another salary increase today, more hunger tomorrow in Venezuela 

President Nicolás Maduro has announced an increase of 30% in Venezuela’s national minimum salary and an adjustment in the food vouchers paid to workers on a monthly basis of 1.5%. Thus, the minimum salary goes from Bs.7,421.66 (US$ 1,178.04 at the country’s official fictional rate of Bs.6.30 per dollar) to Bs.9,648.18 (US$ 1,531.45); while food vouchers will go from Bs.2,475 (US$ 393) to Bs.6,759 (US$ 1,072.85), for a total minimum monthly income of Bs.16,399 (US$ 2,603). These increases will take effect from November 1. However, these improvements can’t beat inflation, which has risen 175% so far this year. (Latin American Herald Tribune,; Bloomberg,



Politics and International Affairs


Venezuela again rejects OAS election observers

Venezuela has once again rejected an offer by the Organization of American States to send a group of election observers to upcoming December 6th legislative elections, saying it doesn't trust the organization. The regime's representative for human rights, Germán Saltrón, says "Venezuela doesn't trust the OAS, the OAS has supported dictatorships, approved coups d'etat and election fraud, and has not practice democracy throughout its history". The government has accepted observers from the Union of South American Nations (UNASUR) and the Community of Latin American and Caribbean States (CELAC). It has not accepted OAS observers since 2006. Saltrón also said the Inter American Human Rights Court is not to be trusted because "it is financed by the United States"; and added that the European Union can participate. More in Spanish: (INFOLATAM,


Maduro calls for prosecution of business leader Mendoza

Venezuela's president has urged legal action against billionaire businessman Lorenzo Mendoza over a phone call which airs the possibility of an international bailout for the nation's ailing economy. The 50-year-old Mendoza runs Venezuela's largest private company, Empresas Polar, and has often been cast as a symbol of unscrupulous capitalism by socialist President Nicolas Maduro and his predecessor Hugo Chavez. This week, National Assembly Speaker Captain Diosdado Cabello broadcast on state media an illegally tapped state phone call between Mendoza and U.S.-based Venezuelan economist Ricardo Hausmann in which the latter says a $50 billion to $60 billion International Monetary Fund package and "adjustment" plan is needed. Maduro said "what he did was a crime for speaking on behalf of the fatherland...I expect he will be charged and must be charged"..adding that he expects the judiciary to "react". Mendoza has rejected the broadcasting of a private conversation as an "attempt to manipulate public opinion with the clear intention of using me in Venezuelan politics." (Reuters,; Veneconomy,; and more in Spanish: Ultimas Noticias,; El Nacional;; El Mundo,;;


Opposition politician Manuel Rosales arrested

Venezuelan opposition politician Manuel Rosales has been arrested on his return to the country after six years of self-imposed exile. Rosales, who said he wanted to take part in December's parliamentary elections, was detained shortly after landing in the city of Maracaibo. He ran against the late President Hugo Chavez in 2006, and fled to Peru in 2009 amid corruption allegations, which he says are politically motivated. He is expected to appear in court in Caracas shortly. Eveling Trejo de Rosales, wife of Manuel Rosales and mayor of Maracaibo, went to the airport to try to meet him. Last month, prominent opposition leader Leopoldo Lopez was found guilty of inciting violence during protests in 2014 in which 43 people - from both sides of the political divide - were killed. He was sentenced to 13 years and nine months in prison. (BBC News,


STRATFOR: Venezuela's leaders prepare for a risky election

A political turnover could be in store for Venezuela, and the country's leaders are doing their best to prepare for it. The Dec. 6 parliamentary elections are less than two months away, and the ruling United Socialist Party of Venezuela (PSUV) stands a good chance of losing its legislative majority. Faced with the prospect of diminished political power, the party's key figures are taking steps to secure their own futures, including banding together and preemptively limiting the opposition's room to maneuver. Even if the opposition manages to gain control of Venezuela's legislature in December, its effect on the country's broader economic crisis will be minimal. But Venezuela's political landscape could look very different in the coming year. If the party suffers a significant defeat, members could perceive it as a harbinger of further electoral losses in 2019 that could imperil their political futures and could splinter into separate factions composed of individuals determined to save their own positions. Regardless of the December vote's outcome, Venezuela's wider economic crisis will continue unabated. With reduced oil export revenues and no major fiscal adjustments on the horizon, the country's public finances will remain strained for the foreseeable future. The crisis will also raise the risk of demonstrations or social unrest as citizens become increasingly dissatisfied. Thus, Venezuela will likely continue to be a risky investment destination and a difficult operating environment for foreign firms until real economic reforms become more politically palatable to the Venezuelan government. (STRATFOR,

World leaders ask UN to set conditions on Venezuela human rights

World leaders of the Madrid Club asked the United Nations (UN) General Assembly to condition the renewal of Venezuela's membership in the UN Human Rights Council to the release of political prisoners, and also linked the renewal to the acceptance by Venezuelan government authorities of an impartial mission of electoral observation for the next parliament vote slated for December 6. (El Universal,


Venezuela's Supreme Tribunal admits that 66% of judges lack tenure

Venezuela's Supreme Tribunal has admitted in a statement to the Inter American Human Rights Committee that six out of every ten judges in Venezuela are temporary and can be removed at any time without any procedure. Constitutional Chamber Judge Carmen Zuleta de Merchán told the Committee that "there are 2,231 judges nationwide, of which 34% have tenure through competitions held in 2002, 2005 and 2006". More in Spanish: (El Universal,



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.


No comments:

Post a Comment