July 14, 2016

International Trade

Major General Efraín Velasco Lugo named head of the national port authority, BOLIPUERTOS

President Nicolas Maduro has named Major General Efraín Velasco Lugo as the new president of the Bolivarian ports (BOLIPUERTOS). He also announced he is designating a single authority for each port: Real Admiral Carlos Martín at La Guaira (Vargas state); General Rafael José Aguana at Puerto Cabello (Carabobo state); General José Noguera Silva at Maracaibo (Zulia state); Rear Admiral Andrés Rojas at Guanta (Anzoátegui state) and General Luciano Marquina at El Guamache (Nueva Esparta state). More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/designan-al-mayor-general-velasco-lugo-nuevo-presi.aspx#ixzz4EHbQzADI; http://www.elmundo.com.ve/noticias/actualidad/noticias/presidente-juramento-a-las-autoridades-unicas-de-c.aspx#ixzz4ENYDK5uW; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/economia/designan-mg-velasco-lugo-presidente-bolipuertos/; El Universal, http://www.eluniversal.com/noticias/economia/maduro-ordena-restructuracion-cinco-puertos_319115)

 

SÍRAGON exports Venezuela-made PC's for the first time

Venezuelan technology products manufacturer SÍRAGON has for the first time exported its top-of-the-range product named All in One PC 7100 Series for sale in several Central American countries. Venezuela will dispatch a number of these computers to Panama, from where they are to be sent to Central American countries such as Nicaragua, Costa Rica and Guatemala. (El Universal, http://www.eluniversal.com/noticias/daily-news/siragon-exports-venezuela-made-pcs-for-the-first-time_319037)

 

Over 200,000 tons of raw materials for agribusiness have arrived at Puerto Cabello this month, according to Nutrition Minister General Rodolfo Marco Torres. General Marco reports that 14 ships have arrived bearing white and yellow corn, soy cakes, paddy rice, raw sugar, baking wheat and durum wheat. He reports there are another 5 ships waiting to offload at least another 100,000 tons, 80% of which will go to the private sector. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/arribaron-puerto-cabello-m%C3%A1s-200-toneladas-materia-prima-para-agroindustria; El Mundo, http://www.elmundo.com.ve/noticias/economia/agro/arribaron-al-pais-228-mil-toneladas-de-materia-pri.aspx)

 

Ship bearing 200 tons of food from Trinidad arrived at Cumaná. The shipment is part of 506 tons purchased from neighboring Trinidad for Sucre state in Eastern Venezuela, and includes chicken, flour, sauces and milk, as well as personal care and cleaning products. Sucre state governor Luis Acuña said the transaction with Trinidad includes 106 tons flown in, and 400 tons by sea. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/buque-cargado-200-toneladas-alimentos-arrib%C3%B3-cuman%C3%A1)

 

Maracaibo’s port received 16 tons of corn for chicken feed, says Zulia state governor Colonel Francisco Arias Cárdenas. The shipment was imported by private business, and will be distributed to chicken farms around the region. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/zulia-recibe-16-toneladas-de-maiz-para-producir-al.aspx#ixzz4EHdE2tNj; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/economia/zulia-recibe-16-toneladas-maiz-producir-alimento-pollos/)

 

 

Oil & Energy

Venezuela’s oil production fell to 13-year low in June, IEA says

Venezuelan crude production fell to a 13-year low last month as an economic crisis weighed on this country’s oil industry, the International Energy Agency said. Output sank to 2.18 million barrels a day, down 240,000 barrels a day from a year earlier and the lowest since February 2003 when an oil workers’ strike trimmed volumes. The drop in production is set to continue, with the IEA forecasting an annual slump of 200,000 barrels a day, double the decline it predicted last month. “While Iran is clearly OPEC’s biggest source of supply growth this year, Venezuela is notching up the largest decline,” the agency said in its monthly report on Wednesday. Iranian production rose to 3.66 million barrels a day in June, maintaining gains seen since the start of the year when international sanctions were lifted. (Bloomberg, http://www.bloomberg.com/news/articles/2016-07-13/venezuela-s-oil-production-fell-to-13-year-low-in-june-iea-says)

 

PDVSA issued US$ 831 million in debt to pay providers this year

State oil company PDVSA has issued US$ 831 million in promissory notes this year to repay debts to service providers, according to its latest financial statement. The notes, with an interest rate of 6.5%, mature in 2019, the company said in its 2015 financial statement. PDVSA has run up over US$19 billion in unpaid bills to service providers as a result of cash-flow problems, which has led some companies to slow work. PDVSA began negotiating private issuances last year to settle years-old suppliers' bills, with at least US$ 310 million of notes in 2015 to companies including General Electric Co. (Reuters, http://www.reuters.com/article/pdvsa-debt-idUSL1N19Z0MY)

 

PDVSA finds procurement fraud in U.S. case

PDVSA is investigating U.S. allegations of a US$ 1 billion bribery conspiracy involving the state oil company and has found there was fraud in procurement processes, according to a report of its 2015 results. PDVSA, the financial motor of President Nicolas Maduro's socialist government, had previously blasted the Houston court case against two Venezuelan businessmen as part of a smear campaign by opponents trying to link it to corruption. But PDVSA's audited financial statement, published this week, said an internal probe "confirmed the company was a victim of fraud in its process of international procurement." The two businessmen, Abraham Shiera and Roberto Rincon, have pleaded guilty after being arrested last year and charged for conspiring to pay bribes for energy contracts. (Reuters, http://www.reuters.com/article/venezuela-usa-corruption-idUSL1N19Z1H9)

 

Venezuela, Trinidad and Tobago continue with gas projects

Representatives of Venezuela and Trinidad & Tobago have met this week to continue with bilateral gas agreements previously signed as part of the development of offshore reserves at the Campo Dragón, “Mariscal Sucre” project, 40 km north off Sucre state. They confirmed the agreements struck on May 24 in Port of Spain apropos the visit paid by President NicolAs Maduro, when they agreed on gas exports from Venezuela to Trinidad and Tobago. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuela-trinidad-and-tobago-continue-with-gas-projects_327501)

 

Bolivia's Morales admits issues in PETROANDINA

Bolivian President Evo Morales has admitted that oil joint venture PETROANDINA is facing economic troubles, and that Bolivia is likely to take charge of this situation. PETROANDINA is comprised of state-owned oil companies YPFB of Bolivia (60% of interests) and Petróleos de Venezuela (PDVSA-40%). “PETROANDINA was an agreement with PDVSA, yet difficulties have arisen. (This situation) is under study; we will likely overcome it, as was the case with other companies facing problems and the State took over,” Morales said during a press conference. (El Universal, http://www.eluniversal.com/noticias/daily-news/bolivias-morales-admits-issues-petroandina_318989)

 

 

Commodities

Venezuela trucks food directly to the poorest as chaos spreads

Catia, a vast network of makeshift homes in western Caracas, has long been a proud bastion of Venezuelan socialism. The residents may be working class but their housing is subsidized, their clinics free, their favorite color ruling-party red. Red T-shirts were everywhere in Catia one recent morning but not for another ribbon cutting. This time, loyalists were unloading a government truck packed with food for once-resolute supporters whose pantries are achingly empty. “Since they told me last night it was on its way, I could barely sleep,” said Andrea Vasquez, a 40-year-old call center operator, who watched as dozens of her neighbors swarmed the truck. “It’s a miracle.” (Bloomberg, http://www.bloomberg.com/news/articles/2016-07-13/as-chaos-spreads-venezuela-trucks-food-directly-to-the-poorest)

 

Venezuela will distribute “consumer cards” to the poorest

Executive Vice President Aristóbulo Istúriz says the Venezuelan government plans to issue “consumer cards” to the poorest, so that they can acquire basic goods at subsidized prices. “We hope to deliver some 500,000 cards in the first stage”, he said. More in Spanish: (Infolatam: http://www.infolatam.com/2016/07/13/venezuela-dara-tarjetas-de-consumo-a-los-mas-pobres-para-productos-basicos/)

 

 

Economy & Finance

CITIBANK decision will impact SIMADI FOREX operations

CITIBANK’s decision to shut down Venezuela’s Central Bank and the Bank of Venezuela’s accounts with the institution will impact SIMADI operations in the FOREX market, since all transactions are carried out by the Central Bank through CITIBANK. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/medida-del-citibank-afectara-operaciones-en-el-sim.aspx#ixzz4EHbeMNkj)

 

Wall Street’s biggest Venezuela bond contrarian feels vindicated

While Wall Street analysts and investors have braced for Venezuela’s default in the past three years, Francisco Rodriguez has remained steadfast in his belief that the country would pay. Now, his contrarian view is winning converts. The nation’s bonds have returned 28% this year -- twice the average gain for emerging markets. Debt investors are betting that Venezuela’s economic crisis will finally help force President Nicolas Maduro from office and usher in a new government capable of making the desperately needed policy changes to avert a total collapse.

Rodriguez, who took up his new role as chief economist at Torino Capital last week after leaving Bank of America Corp. in May, says a new government is likely to make changes including re-establishing market access and offering a voluntary rollover of debt. (Bloomberg, http://www.bloomberg.com/politics/articles/2016-07-12/wall-street-s-biggest-venezuela-bond-contrarian-feels-vindicated)

 

Secret police detains KIMBERLY CLARK staffers for interrogation

Venezuela’s secret police (SEBIN) has detained and interrogated 8 KIMBERLY CLARK employees demanding the whereabouts of company managers, according to a source that did not want to be identified. The company had “6 members of the board and a general manager, all of whom have left the country. There was a national sales manager and seven account managers under them, all of whom have been held for interrogation”. The national sales manager is still being held at Valencia, in Carabobo state. Yirven Laucho, Secretary General of the company union, confirmed the information. He says there is still work going on at the plant located at San Vicente in Aragua state, which was occupied by government forces last Monday, and only one of the 7 production lines is operating, turning out KOTEX protection pads. He says the government will provide raw material. Executive Vice President Aristobulo said the owners “can come back when conditions change, but he will not find a plant, that plant is no longer his, he has already lost it. Any plant that shuts down we will take over with the workers”. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/Sebin-empleados-Kimberly-Clark-interrogarlos_0_883711842.html)

 

 

Politics and International Affairs

Catholic bishops say delaying recall referendum can destabilize Venezuela

Venezuela’s Episcopal Conference (CEV) has urged the National Elections Council (CNE) to let the recall referendum to revoke the mandate of President Maduro take place this year, and says “delaying it” can destabilize the nation politically and socially. “It is the CNE’s duty to tend to the recall referendum so that it can take place this year…it is a political right mandated by the Constitution, to block it or delay it with multiple obstacles is absurd because it endangers the nation’s political and social stability”, said CEV spokesman Bishop Ubaldo Santana, who again offered the Roman Catholic Church’s “good offices” for a dialogue between both sides. More in Spanish: (Infolatam: http://www.infolatam.com/2016/07/12/iglesia-venezolana-dice-que-retrasar-revocatorio-puede-desestabilizar-al-pais/)

 

Ramos Allup says recall referendum is a right and will not be “bargained” in any talks

National Assembly President Henry Ramos Allup says that the recall referendum being sought by the opposition to revoke President Nicolas Maduro’s mandate will not be “bargained” in any possible talks, and that the President has asked to talk to get out of a jam “by throwing cold water on the situation”. “The recall referendum has nothing to do with talks, the recall is a Constitutional right” of the Venezuelan people and does not “belong” to anyone”, he says. Ramos says the opposition is not refusing to talk but will only do so under “respectable conditions” and if Constitutional rights are guaranteed. Maduro has again called on the opposition to enter into talks, while saying the recall referendum is a “no go” and cannot be a precondition for starting talks. “What are they seeking? A war?”, says Maduro. More in Spanish: (Infolatam: http://www.infolatam.com/2016/07/13/ramos-allup-dice-que-revocatorio-no-se-regateara-en-un-potencial-dialogo/)

 

Opposition state governors ask Zapatero to include social problems in talks

Two opposition state governors have met with Spain’s former President José Luis Rodríguez Zapatero, to ask social problems the people are facing be included if there is a dialogue between the Maduro regime and the opposition. Lara state governor Henri Falcón says talks must include matters such as “medicines and services, violence, security and food.” The opposition has continued to insist on preconditions for sitting down to talks with the government, including expanding mediation efforts to include the Vatican, holding the meetings in Venezuela, an end to “illegitimate” arrests, the recall referendum and recognizing the National Assembly. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2416313&CategoryId=10718; http://www.laht.com/article.asp?ArticleId=2416208&CategoryId=10717; and more in Spanish: Infolatam: http://www.infolatam.com/2016/07/12/gobernadores-opositores-piden-a-zapatero-incluir-temas-sociales-en-el-dialogo/)

 

Venezuela insists MERCOSUR pro tem chair is not subject to a consensus

Foreign Minister Delcy Rodríguez is insisting that passing over MERCOSUR’s rotating pro tem chairmanship to Venezuela should not be subject to “any type of consensus” or “condition”. However, Paraguay, Argentina and Brazil and holding off on transferring the chair of the organization to the Maduro regime because it does not comply with MERCOSUR rules on human rights. Only Uruguay, which currently holds the chair, has been favorable to passing the position over to Venezuela. The matter continues under discussion and may be held over until August. More in Spanish: (Infolatam: http://www.infolatam.com/2016/07/12/venezuela-dice-traspaso-de-presidencia-del-mercosur-no-esta-sujeto-a-consenso/)

 

OAS Almagro: Democratic Charter aims to reorient democracy in Venezuela

Luis Almagro, Secretary General of the Organization of American States (OAS) says that the Democratic Charter aims to seek solutions “to redirect democracy rather than to punish” Venezuela. Almagro, a former Uruguayan foreign minister, added that the process for the eventual enforcement of the Democratic Charter is under way. However, he stated that the ultimate goal is not applying such legal instrument, for it would lead to Venezuela’s suspension from the regional organization. (El Universal, http://www.eluniversal.com/noticias/daily-news/oas-almagro-democratic-charter-aims-reorient-democracy-venezuela_327486)

 

Children dying in Venezuelan hospitals

Hospitals in Venezuela are rapidly decaying with a lack of resources such as medicine, endangering the lives of sick patients. CNN's Paula Newton reports (Video Report:http://edition.cnn.com/videos/world/2016/07/13/venezuela-kids-going-without-pkg-newton.cnn)

 

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.