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, March 22, 2016

March 22, 2016


International Trade

 

Cargo that has arrived at Puerto Cabello:

  • 561,44 tons of coffee for Café Venezuela
  • 74,04 tons of female sanitary napkins for Corporación Venezolana de Comercio
  • 23 tons of linseed for Comercializadora Tulipán 2014
  • 2 tons of onion seed for Excel Servicios Logísticos
  • 770 tons of detergent and cleaning products for Corporación Macex
  • 25.000 tons of corn for grupo Souto
  • 14.999 tons of soybean food for grupo Souto
  • 38 containers of air conditioners for importadora Champi
  • 4 auto parts containers for FCA Venezuela
  • Similarly, products such as shoes, slippers, sandals, clothing, fabric rolls, etc. have arrived
More in Spanish: (El Nacional; http://www.el-nacional.com/economia/Llegaron-semillas-cafe-productos-limpieza_0_813518962.html)

 

90.000 tons of rice, durum wheat and soy have arrived at ports here, according to Nutrition Minister General Rodolfo Marco Torres. He said another 30,000 tons of baking wheat are about to arrive, and added that 60,000 tons of white and yellow corn are also scheduled to arrive. He said US$ 27 million have been allocated for seed imports for future crops. More in Spanish: (AVN; http://www.avn.info.ve/contenido/90000-toneladas-entre-arroz-trigo-duro-y-soya-llegaron-puertos-del-pa%C3%ADs)

 

New technology announced for ports here

Foreign Trade Minister Jesús Farías reports new equipment has been installed at La Guaira and Puerto Cabello ports to improve export-import activities here. Both these ports carry out 80% of all transactions, and he says an investment of US$ 60 million can eliminate 60% of former procedures. Farías also claims a new FOREX credit line will be available to local exporters at the protected rate, in order to acquire supplies. More in Spanish: (AVN; http://www.avn.info.ve/contenido/gobierno-venezolano-activa-equipos-tecnol%C3%B3gicos-para-agilizar-actividades-puertos-del-pa%C3%ADs; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/activan-sistema-tecnologico-para-agilizar-tramites.aspx;Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/activan-equipos-tecnologicos-para-agilizar-activid.aspx)

 

 

Oil & Energy

 

PDVSA to import light crude from BP, China Oil

British oil major BP and China Oil have been awarded a tender launched by Venezuela's PDVSA to buy some 8 million barrels of Nigerian and U.S. light crude for delivery during the second quarter, traders told Reuters. The deal, which will significantly increase PDVSA's crude purchases, could in exchange give BP access to Venezuelan oil to process or resell, while increasing the volume that Chinese firms take from PDVSA under loan-for-oil agreements.

China Oil, a unit of state-run China National Petroleum Corporation (CNPC), must deliver 2.7 million barrels of U.S. WTI crude in April at PDVSA's terminal in Curacao at a price of NYMEX WTI plus US$ 1.58 per barrel, according to a Platts report published earlier. (Reuters, http://www.reuters.com/article/us-oil-venezuela-tender-idUSKCN0WK2PC)

 

Venezuela has shut down for a week to cope with electricity crisis

Venezuela has shut down for a week as the government struggles with a deepening electricity crisis. President Nicolas Maduro gave everyone an extra three days off work this week, extending the two-day Easter holiday, Maduro had originally said over the weekend that the extended holiday would only apply to state employees. The government has rationed electricity and water supplies across the country for months and urged citizens to avoid waste as Venezuela endures a prolonged drought that has slashed output at hydroelectric dams. The ruling socialists have blamed the shortage on the El Nino weather phenomena and “sabotage” by their political foes, while critics cite a lack of maintenance and poor planning. (Bloomberg, http://www.bloomberg.com/news/articles/2016-03-16/venezuela-to-shut-down-for-a-week-as-electricity-crisis-mounts)

 

Venezuelan crude oil price hits US$ 30.53

The Venezuelan oil price this week ended at US$ 30.53 per barrel, a US$ 0.93 surge from the previous term.
The local Ministry of Petroleum and Mining explained through its website that "crude oil prices recorded an upward trend this week due to dollar depreciation compared to other currencies, and due to more optimism over a meeting a number of large world (oil) producers will hold next month to agree on measures to stabilize the market."
(El Universal, http://www.eluniversal.com/economia/160318/venezuelan-crude-oil-price-hits-usd-3053)

 

 

Commodities

 

Food distribution in public system dropped 24.72% during 2015, according to the 2015 yearly report from the Nutrition Ministry, which shows that the MERCAL, PDVAL and Bicentenario systems dropped from 1.8 million tons to 1.3 million tons. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Distribucion-alimentos-redes-publicas-cayo_0_815318673.html)

 

Labor leader charges JOHNSON & JOHNSON with sabotaging sanitary napkin production

Jaime Guevara, secretary general of the company union at JOHNSON & JOHNSON, charges that the company has stopped producing personal care products that have regulated prices in favor of others that are sold at higher prices. Guevara made his claim in a telephone call to the government news agency AVP. More in Spanish: (AVN; http://www.avn.info.ve/contenido/johnson-amp-jhonson-sabotea-producci%C3%B3n-toallas-sanitarias; El Nacional, http://www.el-nacional.com/economia/Sindicato-denuncia-irregularidades-produccion-Johnson_0_815318531.html; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/denuncian-saboteo-de-johnson-johnson-en-produccion.aspx)

 

 

Economy & Finance

 

Supreme Tribunal has extended the Economic Emergency Decree for another 60 days starting March 11th, after authorization to renew it was voted down by the National Assembly. Pollsters Félix Seijas of DELPHOS and Luis Vicente León of DATANALISIS, along with political analyst Nicmer Evans, believe that actions by the regime and the Supreme Tribunal over the past 60-days show that the purpose of the Economic Emergency Decree was political and not economic, aimed at evading legislative control and showing strength, and that none of the formal objectives were reached during the first 60 days, More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/160318/tsj-prorrogo-el-decreto-de-emergencia-economica; El Nacional, http://www.el-nacional.com/politica/TSJ-prorroga-emergencia-economica-constitucional_0_812919022.html; and (El Nacional, http://www.el-nacional.com/politica/Evadir-AN-mostrarse-objetivos-emergencia_0_814718653.html)

 

Regime aims at unifying the FOREX rate, says Jesús Faría, Minister for Foreign Trade and International Investments. Faría has stated “the distortions within the economy are so marked, particularly those arising from the brutal drop in oil prices, that we will gradually seek to unify the exchange rate”. More in Spanish: (El Universal, http://www.eluniversal.com/economia/160317/gobierno-mantiene-meta-de-unificacion-cambiaria; Ultimas Noticias: http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/faria-con-dolar-today-se-explica-70-de-la-inflacio.aspx

 

Venezuelan bolivar loses ground

Venezuelans are feeling their lower purchasing power due to the domestic inflation index. By the end of 2015, this index totaled 180.9%, according to the Central Bank of Venezuela (BCV). Nelson Merentes, President of Venezuela’s Central Bank has admitted that the existing family of bills and is insufficient and adds that the bank is pondering on printing notes of 500 (USD 50) and 1,000 (USD 100) bolivars this year. He did not specify an exact date. The projected skyrocketing prices in Venezuela over the following months puts a big question mark as to the successful implementation of a new group of notes with a top value of 1,000 bolivars. (El Universal, http://www.eluniversal.com/economia/160319/venezuelan-bolivar-loses-ground)

 

DICOM FOREX rate up to VEB 249.03/US$1, according to Central Bank data, which reports that 7.11% of all official FOREX transactions have been made at this “floating” rate, while 92.89% of all transactions are made at the “protected” DIPRO rate of VEB 10/US$1. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Dicom-cerro-lunes-bolivares-dolar_0_815318656.html; El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/tasa-simadi-sube-bs--42-11-desde-anuncio-del-dolar.aspx)

 

Government to retain control of housing in Venezuela

The Venezuelan government will retain control over housing, according to Manuel Quevedo, Minister of Housing and Habitat, who has disregarded the enforcement of the ownership law proposed by the National Assembly. He claimed that the cost of a dwelling for the middle class is quoted at US$ 20,000, a price deemed by him as out of Venezuelans' reach. (El Universal, http://www.eluniversal.com/economia/160321/gmvv-to-retain-control-of-building-in-venezuela)

 

 

Politics and International Affairs

 

Obama and Raul Castro mention Venezuela in joint press conference

During their joint press conference in Havana, US President Barack Obama and Cuban President Raúl Castro both referred to Venezuela. Castro said: “it was planned, and there was no time to finish it, to talk about our concern over the destabilization situation that is being attempted in Venezuela, which is counterproductive to the continent’s environment”. Obama, in turn, said: “We spoke about Venezuela. I think the entire region has an interest in a country that faces up to its trade challenge, that responds to the aspirations of its people, and that is a source of stability in the region. That is an interest I believe we should all share.” More in Spanish: (Venevision: http://www.noticierovenevision.net/internacionales/2016/marzo/21/152386=barack-obama-y-raul-castro-hicieron-mencion-en-sus-discursos-sobre-la-situacion-en-venezuela)

 

Maduro meets with Castro brothers on eve of Obama’s arrival in Cuba

Former Cuban President Fidel Castro received Venezuelan President Nicolas Maduro for a meeting in Havana that came on the eve of the arrival on Sunday of U.S. President Barack Obama. Castro and Maduro held a two-and-a-half-hour meeting on Saturday, the Venezuelan president told Cuban state media, adding that he found the former Cuban leader writing and editing articles, “full of optimism and tremendous force.” He also said that 89-year-old Castro – who stepped down from power in 2006 – was the “most informed man on the planet” and remains attentive to the plans for cooperation between Cuba and Venezuela, especially those related to food production. President Maduro reportedly also met with Cuban President Raúl Castro, to review joint programs, and was decorated with the “José Martí Order”. (Latin American Herald Tribune,http://www.laht.com/article.asp?ArticleId=2408164&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/160321/venezuelas-maduro-satisfied-with-results-of-visit-to-cuba; and more in Spanish: Venevisión: http://www.noticierovenevision.net/politica/2016/marzo/18/152183=presidente-maduro-se-reunio-con-raul-castro-para-consolidar-acuerdos-entre-ambas-naciones)

 

Ramos Allup accuses the Comptroller General of obstructing legislative oversight

National Assembly President Henry Ramos Allup has rejected an order by the Comptroller General demanding that all legislative request should be sent to the CG office. Ramos Allup says: “Not only is the Comptroller General’s office remiss in its duties by pimping for regime corruption but also obstructs investigations by the National Assembly”. More in Spanish: (Venevisión: http://www.noticierovenevision.net/politica/2016/marzo/18/152198=ramos-allup-denuncia-obstruccion-de-la-contraloria-general-en-las-investigaciones-del-parlamento)

 

Editor jailed as another paper closes

The director of a major newspaper, "Correo del Caroní", was thrown in jail for four years and another paper, "El Carabobeño", had to close down because it couldn’t get newsprint. Those two incidents took place in Venezuela within days.  “These are Maduro’s contributions to the destruction of democratic media, which Chavez started by shutting down Radio Caracas Television,” said Luis Salamanca, a political consultant in Caracas, on the recent developments. “Maduro is adding a new element: manipulating the supply of newsprint. He is just letting newspapers die. Several newspapers have closed because of the very same problem,” Salamanca said. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408191&CategoryId=10717)

 

92% of all Venezuelans believes the economic crisis has become worse recently

A poll taken in 20 states by Keller and Associates shows that 92% of all Venezuelans believe scarcity has become worse recently, and only 8% say “things are going very well”. 92% called the situation “grave”, 82% consider the general situation, including crime, corruption, cost of living, poverty, housing and the economy has become worse; and 80% say the government is inefficient in solving national problems. More in Spanish: (El Nacional, http://www.el-nacional.com/sociedad/venezolanos-crisis-economica-empeorado-recientemente_0_812918893.html)

 

Oscar Schemel says 58% of all Venezuelans believe Maduro’s exit is the solution

Oscar Schemel, of HINTERENLACES, a pollster widely regarded as pro-regime, says 58% of all Venezuelans believe Maduro’s exit is the solution to economic problems here. Schemel spoke during an interview program conducted by former Chavez Vice President José Vicente Rangel, and said “the national government is reviving confrontation amid a fantastic revolutionary epic”. State media cancelled a previously announced retransmission of the program. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Oscar-Schemel-venezolanos-Maduro-solucion_0_814718561.html)

 

Small protests proliferate in simmering Venezuela

Frustrated neighbors block a road with trash after days without water. Placard-waving nurses halt traffic to demand uniforms and medicines. Women bang pots on balconies when the lights go out. Venezuela is simmering with small-scale street protests as water and electricity services stutter, labor disputes mount, and basic food items become more scarce and expensive amid a worsening economic crisis across the nation. (Reuters, http://www.reuters.com/article/us-venezuela-politics-protests-idUSKCN0WJ1CU)

 

US$ 350 billion would make Venezuela the nation with the most stolen money on earth.

Peru’s Oscar Solórzano, an expert on recovering embezzled funds within the Basel International Institute for Asset Recovery, if it is proven that the amount “looted” by corruption here is above US$ 350 billion, Venezuela would top the list of nations with most stolen money on earth. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Freddy-Guevara-millones-convertiria-Venezuela_0_815318654.html)

 

Two more massacred miners identified in Venezuela

Prosecutor General Luisa Ortega Diaz has announced that two more bodies from among the group of 17 found in a mine in the southeastern town of Tumeremo have been identified. “Just one person remains to be identified of the ... 17 who were executed with firearms and later found in the Nuevo Callao sector (in Bolivar state),” Ortega Diaz said, adding that the two bodies have been turned over to relatives. She said that her office is working the hypothesis that criminal bands carried out the killings, and police have made progress in gaining “control of the ... illegal mining exploitation” in the zone, which is rich in gold. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408200&CategoryId=10717)

 

Egyptian murdered during robbery attempt at Caracas’ international airport

An Egyptian man was shot and killed when he resisted a robbery attempt at Maiquetia’s Simon Bolivar International Airport, Venezuela’s largest airport, a few minutes after arriving in the country, the Prosecutor General’s Office announced. Abdelrahman Ismail Elsayeb Hassan Abdelaziz was murdered on Saturday at the airport, which serves Caracas. The 30-year-old man arrived at approximately 4:30 p.m. on Saturday “on a flight from Frankfurt (Germany) and was intercepted by two men on motorcycles who tried to steal his belongings as he made his way through the national air terminal via an outside path,” the report said. “The man resisted the robbery and was hit by a shot that killed him instantly,” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408195&CategoryId=10717)

 

Venezuela condemns “coup” activity in Brazil

President Nicolas Maduro says right wing forces in Brazil are reactivating a “coup d’etat” there against Brazilian President Dilma Rousseff and former President Luiz Inácio “Lula” da Silva, Maduro said: “Venezuela condemns the “coup d’etat” which is announced and executed by media and parts of the judiciary. It is very dangerous that these paths are taken to snatch away what has been gained in the streets over decades of resistance fighting”, More in Spanish: (AVN; http://www.avn.info.ve/contenido/venezuela-condena-reactivaci%C3%B3n-golpe-estado-brasil)

 

 

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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