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, October 29, 2015

October 29, 2015


International Trade

 

Cargo that has arrived at Puerto Cabello:

  • 201,748 tons of paddy rice, yellow corn, bread wheat, barley and plaster for state agency Corporación de Servicios y Abastecimientos Agrícolas (CASA)
  • 44,832 tons of rice, coffee, beans, meat, milk, margarine and chicken for state agency CASA
  • 2,540 tons of ham and other products of the holiday season for state agency CASA
  • 254 tractors from Brasil
  • 34 containers of rice for state agency CASA
  • 83 containers of milk for state agency CASA
  • 44 containers of de margarine for state agency CASA
  • 205 containers of chicken for state agency CASA
  • 205 containers of beef for state agency CASA
More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=33891; Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/m%C3%A1s-250000-toneladas-alimentos-ha-despachado-puerto-cabello-octubre; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/mas-de-250-mil-toneladas-de-alimentos-llegaron-al-.aspx)

 

Cargo that has arrived at Bolipuertos La Guaira:

  • 30,000 tons of corn from México


 

Prices on imports brought into Venezuela using private dollars must be calculated at SIMADI rates

Executive Vice President Jorge Arreaza says that all merchants using their own US$ currency in order to import products "must use the SIMADI dollar as a reference for setting prices. They will never again steal from the people." In view of this, most importers have paralyzed privately funded import operations. More in Spanish:  (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/importaciones-con-dolares-propios-deberan-calcular.aspx#ixzz3pwuXjvbZ; El Mundo, http://www.elmundo.com.ve/noticias/economia/politica/arreaza--el-pueblo-es-factor-clave-para-hacer-cump.aspx; http://www.elmundo.com.ve/noticias/economia/politica/importaciones-con-dolares-propios-deberan-calcular.aspx)

 

 

Oil & Energy

 

Maduro: "We produce oil and speculators price it"

President Nicolás Maduro has referred to oil matters and stressed that unrealistic prices are imposed on oil. He says that once again he will bring forward his proposal of implementing a scale to calculate the price of crude oil to other oil producing countries. He expects international support, and will a visit Saudi Arabia in the context of the Fourth Summit of Heads of State and Government of South America – Arab Countries (ASPA) on November 3-5, to insist on his proposal to recover the price of crude oil. (El Universal, http://www.eluniversal.com/economia/151028/maduro-we-produce-oil-and-speculators-price-it)

 

Venezuela and Trinidad will jointly explore gas deposits in their common border, says Foreign Affairs Minister Delcy Rodríguez on Monday. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45955&idc=4)

 

 

Economy & Finance

 

Venezuela is selling off gold reserves, PDVSA makes US$ 1.4 billion bond payment

In a sign of how Venezuela is growing increasingly desperate to acquire hard currency, a report released this week showed the country has been stepping up its sales of gold. The value of the Central Bank’s bullion holdings fell 28% at the end of May from a year earlier, while the spot price for the metal declined just 12%. The figures, while reflecting transactions that took place five months ago, underscore the efforts the government is taking to raise the cash to repay creditors and fund imports. With US$ 3.5 billion of bond payments due this week and next, international reserves are hovering near a 12-year low of US$ 15.2 billion, including gold holdings that totaled US$ 11.8 billion at the end of May. Venezuela had about US$ 42 billion of total assets -- including off-budget funds -- at the end of the third quarter, of which US$ 15 billion was liquid, says Barclays economist Alejandro Arreaza. He said liquid assets will fall to about US$ 8 billion by year end. The country and its state oil company PDVSA have US$ 12 billion in bond payments coming due next year.   The Bolivarian government has met all its international commitments, despite domestic and international attacks,” Finance Minister Rodolfo Marco Torres said Wednesday, after PDVSA paid US$ 1.4 billion of maturing bonds. A US$ 2.05 billion amortization payment on the PDVSA 2017 bond is due at the start of November. General Marco says. PDVSA has made US$ 5 billion in bond payments over the last 15 days. (Bloomberg: http://www.bloomberg.com/news/articles/2015-10-28/venezuela-is-selling-off-its-gold-reserves-as-bond-payments-loom; Reuters, http://www.reuters.com/article/2015/10/28/venezuela-bonds-idUSL1N12S04920151028; Reuters, http://www.reuters.com/article/2015/10/28/venezuela-pdvsa-bond-idUSL1N12S1PU20151028)

 

...and again shows doomsayers may be wrong

Over the past year, no shortage of bond investors and analysts have predicted a Venezuela default. Just last week, Loomis Sayles & Co. and Ice Canyon LLC joined the fray, saying the country, rocked by the plunge in oil prices, would likely halt debt payments next year. Yet the cash-strapped nation has managed to stay current on its notes. Bond prices show investors increasingly expect Venezuela’s state-owned oil company to pay US$ 4.3 billion due over the next month and the government to make good on payments of $2.1 billion due in February. After that, the country wouldn’t have another foreign debt payment on principal until August 2016. (Bloomberg, http://www.bloomberg.com/news/articles/2015-10-27/venezuela-avoiding-default-again-shows-doomsayers-may-be-wrong)

 

Proposed 2016 budget is 47.8% lower than that of 2015's - in dollars

The 2016 budget currently being voted on by National Assembly is 47.8% less than total resources budgeted for this year, when estimated at the SIMADI VEB 200/US$ 1 official rate. The 2016 projected budget is for VEB 1.5 billion, which is US$ 7.74 billion at the official SIMADI rate, which applies to all transactions other than imports carried out by the National Foreign Trade Center (CENCOEX). More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Presupuesto-calculado-dolares-menor_0_728327368.html)

 

Maduro regime is suing DolarToday

The government of Nicolás Maduro insists on blaming a third party for the disaster caused by its foreign exchange policy. Now the Central Bank of Venezuela is suing DolarToday before a U.S. court. As is known, DolarToday is a financial blog run by Venezuelan residents in the U.S. that publishes a free-market exchange rate based on daily transactions of bolivars and Colombian pesos taking place in Cúcuta, Colombia.
The lawsuit is based on the assumption that the information published by DolarToday on the value of the dollar sold on the parallel market has exacerbated inflation in Venezuela and further devalued the bolívar currency. (Latin American Herald Tribune,
http://www.laht.com/article.asp?ArticleId=2398869&CategoryId=10717)

 

 

Politics and International Affairs

 

Ex-prosecutor speaks out on Lopez 'sham trial', regime claims the US is behind his statements

A former Venezuelan prosecutor has accused the government of jailing an opposition leader "because they feared his leadership". Franklin Nieves, who prosecuted Leopoldo Lopez, said in Miami after leaving Venezuela that Lopez was innocent and the evidence against him was false. Nieves is reportedly seeking asylum in the United States. Asked if Lopez should be free, the former prosecutor said: "Yes, indeed, because after examining each and every piece of evidence it was shown that this person had at no point made even a single call to violence." Asked why he had not spoken out before Lopez was sentenced to 13 years and nine months in prison, Nieves said that he had remained silent "out of fear and because of the pressure exerted by each one of our bosses on prosecutors working at the national level". He then explained that the pressure filtered down from President Nicolas Maduro and National Assembly President Captain Diosdado Cabello through the Prosecutor General to individual line managers who got prosecutors to act "on the whims" of the authorities. Nieves went on to allege that he was instructed to arrest Lopez to "take him out of the political game" and that the order came from President Maduro. He also alleged that the case of Lopez was not unique: "There are innumerable cases in which people were investigated and innocent people detained," he said.  Venezuelan Prosecutor General Luisa Ortega dismissed Nieves' allegations, saying that "at the state prosecutors' office we don't pressure anyone". She added that Nieves had given in to "pressures from foreign and domestic elements" although she did not specify what pressures those were. But Minister of Foreign Affairs Delcy Rodríguez referred to statements by Nieves saying: "The way the US blackmails, threatens, and buys off public prosecutors in Latin America to hinder justice and satisfy its interests is vulgar", and rejected remarks by US State Department spokesperson John Kirby who previously said: "If true, these statements highlight the lack of judicial independence and adherence to due process in Venezuela." For his part, the ´government's People's Defender Tarek William Saab said that what Nieves said regarding the López trial "is not on the record, it simply doesn't exist". (BBC News: http://www.bbc.com/news/world-latin-america-34656748; Bloomberg, http://www.bloomberg.com/news/articles/2015-10-28/judge-who-helped-jail-venezuela-s-lopez-says-case-was-fabricated; El Universal, http://www.eluniversal.com/nacional-y-politica/151028/ex-public-prosecutor-govt-seeks-to-take-lopez-out-of-the-political-gam; http://www.eluniversal.com/nacional-y-politica/151028/venezuelan-fm-the-us-buys-off-public-prosecutors-in-latam; http://www.eluniversal.com/nacional-y-politica/151028/saab-declaraciones-de-franklin-nieves-no-existen; El Nacional, http://www.el-nacional.com/politica/Defensor-Saab-validez-denuncias-Nieves_0_727727466.html)

 

Maduro and Defense Minister criticize remarks by US Southern Command Chief on Venezuela

President Nicolás Maduro has criticized the recent statements by the Chief of the US Southern Command, John Kelly, about Venezuela's situation. Kelly referred to an alleged "humanitarian crisis" in Venezuela and noted that the US would taken action on Venezuela "only if we are asked to do so" through international bodies. He also voiced concern over factors such as "an inflation rate of 200%." For his part, Maduro labeled Kelly as "a loser," because drug trafficking has grown in the US. Defense Minister Vladimir Padrino expressed "profound indignation", at Kelly's statements that Venezuela is "on the point of implosion", and called them "a new and proof irrefutable proof  imperialist intervention". (El Universal, http://www.eluniversal.com/nacional-y-politica/151028/maduro-criticizes-remarks-of-us-southern-command-chief-on-venezuela; and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/151029/fanb-rechaza-injerencia-del-comando-sur-de-eeuu; AVN; http://www.avn.info.ve/contenido/alto-mando-fanb-expres%C3%B3-rechazo-nuevas-declaraciones-injerencistas-imperiales; El Nacional, http://www.el-nacional.com/politica/declaraciones-John-Kelly-chavismo-rechazo_0_728327384.html)

 

Former Planning Minister Ricardo Hausmann’s attorneys have filed a complaint at the Prosecutor General’s Office on Monday against National Assembly’s Chief Diosdado Cabello, for the unlawful broadcast of a private conversation, simulation of a crime, incitement to hatred and to collective anxiety and instigation to commit a crime. This, in reaction to the audio broadcast by Cabello in his VTV weekly show. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45953&idc=1)

 

Polar CEO Lorenzo Mendoza says he will not leave the country

Polar Enterprises President Lorenzo Mendoza says he will not leave Venezuela after being denounced to the Prosecutor General by the pro government faction of the National Assembly for "treason, usurping functions and collusion to commit a crime". "I live here with my family, I will always live here with my family, I'm not going anywhere", he said - surrounded by cheering employees and workers - and promised to respond with "more work and commitment" against what he called a "continuous and increasing harassment" by authorities. More in Spanish: . (El Nacional, http://www.el-nacional.com/economia/Lorenzo-Mendoza-descarto-dejar-pais_0_727727385.html)

 

Guyana rules out giving Venezuela access to Atlantic waters

Guyanese President David Granger has ruled out giving Venezuela access to the Atlantic as part of any settlement of the border dispute over Essequibo region. “We cannot sell out. We cannot give away. We cannot offer the adversary any corridor or any passage,” Granger said on Tuesday after the successful completion of Exercise Greenheart, a tactical exercise in the Cuyuni-Mazaruni area in Region Seven. The president’s comments came days after former President Bharrat Jagdeo announced that his administration had considered a negotiated settlement to the dispute with Venezuela that would have seen Guyana retain all of Essequibo region in keeping with the 1899 arbitration decision while allowing its western neighbor access to the Atlantic Ocean off Essequibo. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2398901&CategoryId=10717)

 

Maduro plans to meet with Colombia´s Santos

President Nicolás Maduro says he expects to meet with his Colombian counterpart Juan Manuel Santos during the next few days. Maduro reports he had a telephone call with Santos and agreed to a meeting soon, to discuss proposals to create a frontier of peace. "We have proposals ready on military affairs, on fuel, to legalize the entire procedure for buying and selling fuel". More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/maduro-anuncia-proxima-reunion-con-santos.aspx#ixzz3pr5VAN2J)

 

 

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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