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, May 31, 2016

May 31, 2016

International Trade


Cargo that has arrived at Puerto Cabello:

  • 30.000 tons of raw sugar
  • 60.000 tons of paddy rice
  • 60.000 tons of baker wheat
  • 10.000 tons of crude soybean oil
  • 30.000 tons of cake of soy
More in Spanish: (Bolipuertos,; Notitarde,; Agencia Venezolana de Noticias;; El Universal,; Ultimas Noticias,


Trade with Colombia down another 20%

Data from the Colombia’s National Statistics Department (DANE) indicate trade between Colombia and Venezuela during Q1 2016 was only US$ 311 million, down 20% from US$ 389 million last year. (El Universal,



Logistics & Transport


Airlines suspend more flights to Venezuela as economic crisis worsens

Venezuela has for years seen airlines reduce capacity to this country as they struggled to repatriate revenue. Now, two more airlines are calling it quits altogether. LATAM Airlines Group SA, Latin America’s largest carrier, said Monday that it would cut all flights to Caracas by August. LATAM also highlighted economic conditions, saying it wouldn’t resume flights when things improved. A day earlier, Deutsche LUFTHANSA AG had said it would suspend its three weekly flights to Venezuela next month “until further notice.” The German airline’s spokesman, Andreas Bartels, pointed to the challenge of repatriating revenue from Venezuela and a sharp drop in ticket demand -- especially among business travelers -- with the nation mired in its third year of a deep recession. Venezuela owes Lufthansa over US$ 100 million in ticket revenue. Carriers have struggled for years to transfer back profits from Venezuela, leaving billions of dollars trapped in bolivars -- the local currency. The International Air Transport Association (IATA) has been pushing Caracas to free trapped airline revenue. (Bloomberg,; Reuters,; El Universal,; Reuters,; El Universal,



Economy & Finance


Venezuela’s oil income drops to under US$ 100 million per month

The drop in oil prices, the weight of foreign debt service cost, and lower production levels have drastically closed the stream of oil dollars that used to flow into Venezuela’s state coffers, lowering real income contributions to mere drops. Experts report that PDVSA contributions to Central Bank accounts are now below US$ 100 per month, after costs and debt service. This is in contrast to US$ 2-3 billion the company used to contribute two years ago. Russ Dallen, managing partner at Caracas Capital Markets, explains that “the numbers do not work”, leading the Maduro regime to sell off its few remaining foreign assets and spend reserves on importing around US$ 1 billion in food each month. Maduro himself has acknowledged the gravity of the situation, and said: “If we look to January 2010, income was US$ 1.790 billion; it was US$ 2.463 billion in January 2011; it was US$ 3 billion in January 2014; US$ 815 million in January 2015; and in January 2016 we only have US$ 77 million”.  More in Spanish: (El Nuevo Herald:


Economic czar hints at FOREX release

Economic Affairs Vice President Miguel Pérez Abad has seemed to hint that FOREX operations will soon be liberated. He told media “we will soon release, set in motion, the FOREX system, particularly that which is of highest interest to the domestic economy, the supplementary exchange system”. He added that the “exchange rate relies on the market behavior and it acknowledges other stockholders, not only the government, because it is twofold: capture foreign currency, manage foreign currency to accomplish two fundamental goals, such as import substitution and promote exports.” However, expert economist Henkel García, of ECONOMÉTRICA, clarified that Pérez Abad did not promise to fully liberate the exchange rate, “what he meant was that DICOM would soon be implemented, something which has not yet happened…what he is talking about is that the new system would really be one of free access”. (El Universal,; and more in Spanish: El Nacional,



Politics and International Affairs


OAS head Almagro seeks emergency meeting on Venezuela

The head of the Organization of American States (OAS) has called for an urgent meeting to see if crisis-hit Venezuela's socialist government had breached democratic rules, which could lead to a process of suspension. Luis Almagro, a former Uruguayan foreign minister, has called Venezuelan President Nicolas Maduro a "petty dictator," accusing him of disrupting democracy by blocking the opposition-controlled congress and putting loyalists in the Supreme Court. A statement from the Washington-based OAS said Almagro was invoking the body's Inter-American Democratic Charter and had requested a meeting of the permanent council between June 10-20 to analyze the situation in Venezuela. Venezuela views the OAS as a pawn of hostile U.S. policy, and Maduro has dismissed Almagro as a turncoat working for its ideological adversaries in Washington. A two-thirds vote in the 34-nation OAS' General Assembly would still be needed to suspend Venezuela. Caracas has lost the support of diplomatic heavyweights Brazil and Argentina following their recent shifts to the right. But it still enjoys strong support from small Caribbean and Central American nations, including those who benefit from preferential oil and fuel sales, which could ensure it a numerical advantage in any vote. (Reuters:


National Assembly President to ask for the floor at OAS meeting

Henry Ramos Allup, President of the National Assembly, says he will request the floor at the Permanent Council of the Organization of American States (OAS) to raise the issue of the current crisis here. Ramos says initiatives by OAS Secretary General Luis Almagro are “invaluable”. (El Universal,


UNASUR sponsored efforts toward a dialogue here appear to be failing

The Union of South American Nations (UNASUR) has been promoting talks between the Venezuelan regime and its opponents, using the good offices of former Presidents José Luis Rodríguez Zapatero (Spain); Leonel Fernandez (Dominican Republic) and Panama (Martín Torrijos). A statement by UNASUR Secretary General Ernesto Samper says the talks are designed to strengthen the economy, preserve the rule of law, democracy and national sovereignty. Exploratory talks were held with both sides – separately - in the Dominican Republic last week, but Venezuela’s Foreign Minister Delcy Rodríguez went on media to falsely report both sides had met, which drew a wave of criticism. Opposition representatives called Rodríguez a liar and said that past UNASUR efforts have failed. They stressed that they did meet with UNASUR representatives to emphasize their four key conditions for entering into talks: Immediate freedom for political prisoners, a democratic solution this very year, respect for the National Assembly, and official recognition of the domestic humanitarian crisis. The Democratic Unity coalition (MUD) further said that any effort towards a dialogue is not viable if these demands are not accepted. For its part, the government priority is to block or delay a recall referendum against President Nicolas Maduro. Given the high level of polarization and confrontation for more than 15 years there are no bridges between the government and the opposition here. Civil war talk prevails on both sides, with “chavistas” accusing the opposition of coup-mongering and being the allies of imperialism; and the opposition refusing to recognize any legitimacy in the regime. UNASUR Secretary General Ernesto Samper reported the separate meetings and said they would continue.  (Bloomberg,; El Universal,; and more in Spanish: (Infolatam: Noticias,;; America Nuestra:; El Universal,


Roman Catholic hierarchy says UNASUR is not adequate to promote talks here

Venezuela’s Roman Catholic hierarchy is willing to lend its good offices for talks needed to meet the national crisis, and believes the Union of South American Nations (UNASUR) is not adequate as a facilitator for contacts that began last week in the Dominican Republic. The bishops believe that “UNASUR can do little to promote talks, it lacks the strength to further a dialogue, and is not an adequate participant since the government had a lot to do with its formation. In addition, at other times UNASUR efforts came to nothing. A strong player is needed, or several international organizations, that are accepted as valid by both sides”.  More in Spanish: (El Nacional,


Elections Council calls off key meeting with opposition representatives

Miranda state governor and opposition leader Henrique Capriles reported that the National Elections Council (CNE) called off a scheduled meeting with opposition representatives to discuss the requested recall referendum. He called for new demonstrations to demand action by the CNE, which he accused of stalling. More in Spanish: (El Universal,


Kerry welcomes bid to spur talks between Venezuela, opposition

U.S. Secretary of State John Kerry spoke to former Spanish Prime Minister José Luis Rodríguez Zapatero on Thursday to welcome the efforts he is leading to facilitate dialogue between the government of Venezuela and members of the Venezuelan opposition. Kerry said the United States stands ready to help Zapatero, alongside former Dominican President Leonel Fernandez and former Panamanian President Martín Torrijos, in their efforts. (Reuters,; El Universal,


Mexico calls for inclusive talks in Venezuela

The Mexican government welcomed “the first encounters for talks” between the Venezuelan government and the opposition and made an appeal for an “inclusive” dialogue. The Mexican Ministry of Foreign Affairs says it hopes the initiative will help “Venezuelans find a solution to the tough situation in their country.” (El Universal,


Argentina could seek MERCOSUR meeting on situation in Venezuela

Argentina’s Foreign Affairs Minister Susana Malcorra has announced that her government is calling for a meeting of foreign ministers of the Southern Common Market (MERCOSUR) to tackle the current situation in Venezuela. Malcorra said that the democratic clause of the economic bloc is likely to be enforced in Venezuela, but reiterated that “the only solution” to the situation here requires “talks” between the government and the opposition. (El Universal,


Argentina, Chile and Uruguay appeal for an urgent political dialogue in Venezuela

Argentina, Chile and Uruguay in a joint statement released on Friday issued “an urgent call for an effective political dialogue and a genuine civic understanding among all political and social actors called for political dialogue in Venezuela” and offered to help with a “national reunion” of the political and social forces of the country, The appeal was made extensive to the government, the National Assembly, under opposition control, and all political and social groups. (Mercopress:


Opposition lawmakers report on Venezuela’s crisis in Paraguay

Opposition legislators from Venezuela met with the head of the Paraguayan Chamber of Deputies, Hugo Velásquez, to report that Venezuela is facing “a humanitarian crisis” because the government “has destroyed the country’s productive apparatus.” The delegation told journalists that Venezuela “lacks basic products” and that nationals “are going through an inconceivable situation verging on atrocity,” Efe reported. (El Universal,


Washington Post Editorial: The agony of Venezuela continues

Numerous governments, including the Obama administration, last week called for political negotiations in Venezuela to head off an incipient and potentially catastrophic breakdown of political and economic order. Former Spanish prime minister José Luis Rodríguez Zapatero traveled to Caracas with other statesmen to urge President Nicolas Maduro and opposition leaders to start talking. But Maduro was otherwise occupied. At the end of the week, he ordered tanks, aircraft and soldiers to patrol the country, claiming — not for the first time — that he was trying to head off a U.S. invasion. Thus does the delusional heir of Hugo Chávez drag a country of 30 million people, with the world’s largest oil reserves, over a cliff. By most measures, Venezuela is already a failed state: Amid crippling shortages of food, medicine, power and water, every societal ailment is soaring. Inflation is headed toward 700%, and the murder rate is probably the world’s second-highest, after El Salvador’s. According to the New York Times, deaths of infants under a month old in public hospitals are 100 times more common than three years ago, while a coalition of nongovernmental organizations says at least 200,000 people with chronic illnesses lack the medications for them. An April poll, reported by the Miami Herald, showed that 86% of Venezuelans said they bought “less” or “much less” food than they used to, while only 54% said they ate three times a day. No wonder there have been numerous reports of mobs sacking food warehouses, as well as dozens of instances of vigilante lynching of suspected thieves. Thanks to Maduro and the corrupt and incompetent coterie that surrounds him, this chaos is likely to grow steadily worse.  Calling for “political dialogue” is one way to respond to this unfolding crisis. Yet Maduro and other top regime officials, many of them implicated in drug trafficking or other major crimes, have repeatedly failed to respond seriously. It’s time for more pressure to be put on them, such as through sanctions by the Organization of American States under its democracy charter. (The Washington Post:


Venezuela drifts into new territory: hunger, blackouts and government shutdown

Step by step, Venezuela has been shutting down. This country has long been accustomed to painful shortages, even of basic foods. But Venezuela keeps drifting further into uncharted territory. In recent weeks, the government has taken what may be one of the most desperate measures ever by a country to save electricity: A shutdown of many of its offices for all but two half-days each week. But that is only the start of the country’s woes. Electricity and water are being rationed, and huge areas of the country have spent months with little of either. Many people cannot make international calls from their phones because of a dispute between the government and phone companies over currency regulations and rates. COCA-COLA FEMSA, the Mexican company that bottles COKE in the country, has even said it was halting production of sugary soft drinks because it was running out of sugar. There is often little traffic in Caracas simply because so few people, either for lack of money or work, are going out. Last week, protests turned violent in parts of the country where demonstrators demanded empty supermarkets be resupplied. And on Friday, the government said it would continue its truncated workweek for an additional 15 days. The growing economic crisis has turned into an intensely political one for President Nicolas Maduro, who looks increasingly encircled. American officials say the multiplying crises have led Maduro to fall out of favor with members of his own socialist party, who they believe may turn on him, leading to chaos in the streets. (The New York Times:


Harrowing scenes of Venezuela on the brink of collapse – in photos

The lines outside Venezuelan supermarkets can stretch for hours, snaking down sidewalks and right-angling around corners. Each one is like a hissing fuse. Will they explode? Venezuela withers away a little more each week. Another food staple or medicine or industrial part goes missing, bringing the breaking point closer. The national guard troops policing the supermarket lines grip their riot shields and truncheons tighter, looking ever more jittery. It all is a waiting game. The government of President Nicolas Maduro is waiting for a rise in oil prices to save it from catastrophe. It is waiting for rainfall to rescue its hydroelectric plants and end the rotating blackouts that have cut the work week for state employees from five days to two. The government is holding on to hopes of another loan from China, or any other creditor willing to lend it a little breathing room. Venezuela’s political opposition is also watching the fuse, and sometimes trying to fan it, but its street protests look small beside the food lines. The opposition took control of parliament in December, but that didn’t matter. Maduro disregards their laws, their votes, their condemnations and warnings. They’re bystanders too, for the most part. For how much longer? The waiting game goes on. Venezuela’s neighbors are playing it, too, wondering if the crash can be softened and how far it may ripple. U.S. officials think the end is close. But all manner of experts and outsiders have been saying that about Venezuela for a while now, and the lines just get longer. The weariness looks like exhaustion in these images from Venezuelan photographer Alejandro Cegarra. His pictures show the Caracas park where he played as a kid, now in ruins, and a nearby McDonald’s, empty of customers because runaway inflation means a Happy Meal costs nearly a third of an average monthly wage. There is no shortage of street crime and violence in this dystopia. While Cegarra found plenty of battle-clad guardsman to keep the supermarket lines in formation, the cop in a nearby park was a cardboard cutout. Venezuela is running on an empty tank. The government can’t stop the slide, and the opposition can’t stop the government. All that’s left to do is wait until something gives. (The Washington Post:


Spain to monitor situation of its nationals living in Venezuela

Spain will closely monitor the situation of the nearly 200,000 Spanish nationals living in Venezuela in view of the deteriorating conditions in the Andean nation, Deputy Prime Minister Soraya Saenz de Santamaria said Friday.
She cited the “very significant deterioration” of public safety in Caracas and other cities and said Spaniards living in Venezuela are suffering from the same shortages of basic necessities affecting the rest of the population. (Latin American Herald Tribune,


Is the Venezuelan regime committing genocide by omission?

Oliver Sánchez, an 8-year-old child who participated in a demonstration because he was not receiving the chemotherapy procedure he required due to the lack of appropriate medicines, has passed away. Sánchez had Leukemia and, in his last days, he was rushed from one hospital to another because any of them ensured medical attention because of the lack of supplies. He died after 10 days of intensive care in a private clinic. At the same time, patients of Hospital Vargas in Caracas have to buy everything (even their own drinking water), while the company that used to provide food to that public health center stopped doing so simply because the Government does not pay. (Latin American Herald Tribune,


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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