August 16, 2016

International Trade

Cargo arrivals:

The Puerto Cabello Port authority reports:

• 90,000 tons of white corn on three ships: “Atlantic Yucatán” “Coresky Ol” and “Orchard Búnker”
• 63,000 tons of baking wheat on the “Strategic Sinergy” and the “Fatih”
• 32,000 tons of yellow corn on the “Western London”
• 35.347 tons of yellow corn and soy cakes on the “Dolor Vita”
• 30,000 tons of raw sugar on the “Miss Simona”
• 29,658 tons of general cargo on the “Dodo” and
• 29,910 tons of general cargo on the “Clipper Brilliance”
• 48,000 tons of wheat, unspecified.

It also reports that seven more ships are at bay bearing 213,000,000 tons of staples, including sugar, white and yellow corn, durum wheat and baking wheat.

The Guanta (Anzoátegui state) port authority reports the arrival there of 89,412 tons of medical supplies and basic needs cargo.  More in Spanish:  (Notitarde, http://www.notitarde.com/En-descarga-522915-tm-de-materia-prima-para-alimentos/Economia/2016/08/13/1016851/; El Universal, http://www.eluniversal.com/noticias/economia/disponibles-523-mil-para-producir-alimentos_431697; Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=34400;  http://www.bolipuertos.gob.ve/noticia.aspx?id=34402)

 

Partial and gradual border opening underway with Colombia

President Nicolas Maduro and his Colombian counterpart Juan Manuel Santos have met and agreed to gradually reopen the bilateral border, shut down by a Maduro decree one year ago. During a first stage – underway - the border will be open to daytime pedestrian crossing at five designated points. They announced that they had agreed to the sale of Venezuelan fuel in Colombian service stations, and said a bilateral group will seek payment forms for trade between both nations. Vehicle transportation is to be reopened gradually. During this past weekend over 90,000 Venezuelans crossed on foot into Colombia seeking basic supplies, and purchases have been limited to small amounts for personal consumption only. Around 6,000 military personnel were deployed to guard the border crossing, and Colombia has implemented a border crossing permit. Tires and automotive spare parts have been banned until formal trade channels are established; and talks will continue to determine with goods are to be considered basic for Venezuelans. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2418673&CategoryId=10717; and more in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/nacionales/2016/agosto/11/165571=presidentes-maduro-y-santos-acuerdan-la-reapertura-; http://www.noticierovenevision.net/nacionales/2016/agosto/14/165841=mas-de-90-mil-personas-cruzaron-la-frontera-colombo-venezolana-en-busca-de-productos-basicos; http://www.noticierovenevision.net/economia/2016/agosto/15/165980=primera-etapa-de-reapertura-de-la-frontera-solo-permitira-paso-para-compras-minimas; Notitarde, http://www.notitarde.com/Pacto-fronterizo-no-cumple-con-las-expectativas/Economia/2016/08/13/1016714/)

 

Uruguay claims MERCOSUR presidency faces "legal vacuum", while Brazil analyzes Venezuela’s membership

Uruguayan Foreign Minister Rodolfo Nin Novoa said that no joint leadership of the Common Market of the South (Mercosur) is provided for under any regulation, adding that Venezuela would not accept such move. “(A joint leadership) is not provided for, and if so, we need consensus anyway,” he said, stressing that “there is no pre-requisite to take over (the bloc’s presidency). There is a legal vacuum.” Earlier, his Brazilian counterpart José Serra suggested that Mercosur be led by an “informal council of ambassadors” which would be effective until December, when Argentina must hold the presidency, in order to stop the crisis over the rotating presidency transfer. At the same time, Brazil’s Foreign Minister José Serra says MERCOSUR will now decide which “legal steps” can be applied to Venezuela for unilaterally failing to comply with community entry requisites. Venezuela’s Foreign Ministry issued a statement saying charges of non-compliance are a contrivance to exclude this nation from MERCOSUR, and claiming that Venezuela has complied more fully than other nations. (El Universal, http://www.eluniversal.com/noticias/daily-news/uruguay-claims-mercosur-presidency-faces-legal-vacuum_431884); and more in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/actualidad/politica/venezuela-niega-haber-incumplido-protocolo-de-adhe.aspx#ixzz4HUcXU2pS; Notitarde, http://www.notitarde.com/Venezuela-no-incumple-protocolo-de-Mercosur/Economia/2016/08/16/1017280/; Noticiero Venevision: http://www.noticierovenevision.net/economia/2016/agosto/13/165746=brasil-expreso-que-mercosur-decidira-

 

Trade Minister claims over 500 companies have been driven to foreign markets

Foreign Trade and Investment Minister Jesús Faría says the Venezuelan government has guided 500 companies from different production sectors towards foreign markets. He said his ministry has been able to cut 60% of red tape for exports, and announced that the mattress manufacturer LATINFLEX expects to carry out its first export to Curacao and later to Aruba, Ecuador and Cuba. (El Universal, http://www.eluniversal.com/noticias/daily-news/over-500-companies-driven-foreign-market-venezuela_431541)

 

 

Oil & Energy

Lack of investment, payment delays hamper Venezuela oil output

Venezuela is on track to suffer its steepest annual oil output drop in 14 years as it suffers the effects of an economic crisis and years of under investment and mismanagement. The state-run oil company, Petroleos de Venezuela (PDVSA), is struggling to stem a production decline that has accelerated this year as a result of payment delays to suppliers, lack of investment in equipment, and poor planning in the country's vast oil fields. In the 12 months to June, Venezuela's crude output fell 9% to 2.36 million barrels per day (bpd), while the Organization of Petroleum Exploration Countries (OPEC) has boosted its output by 4%, according to the group's official figures. Venezuela's oil minister and PDVSA president, Eulogio Del Pino, last month confirmed a 220,000-barrel-per-day production decline -- around 8% -- so far this year compared with 2015. PDVSA's crude exports, which account for 94% of the country's hard currency income, fell to 1.19 million bpd in July, excluding independent sales made by its joint ventures. An increase in equipment theft, maintenance delays, low salaries, and what they called a sense of "abandonment" of some oilfields are continuing to hit production. Del Pino told local media last month that power outages and limited upgrading capacity to convert Venezuela's extra heavy oil into exportable crude has hampered production. It has forced PDVSA to import some 95,000 bpd of heavy naphtha and light crude to dilute its oil. These problems, occurring while oil services providers reduce operations in Venezuela, have analysts forecasting that production will not recover in the second half of the year, falling instead to its lowest level since a strike that brought output down to an average of 2.56 million bpd in 2003. Venezuela's active rig count fell to 49 in July according to Baker Hughes, the lowest since the end of 2011. U.S.-based oil servicing giant Schlumberger noted a "significant reduction of operations" in Venezuela in its most recent earning release and Halliburton said it is operating on fewer active rigs in Latin America, including Venezuela. PDVSA has said there are ongoing talks to solve payment issues with many companies, including those. PDVSA has faced problems maintaining output levels at areas that need secondary recovery techniques such as water, gas and vapor injections into reservoirs. "PDVSA, who has no money leftover at all, now needs even more investment in exploration and production than in the previous decade to see its output to revive. At this price level, that is not going to happen," said a former PDVSA executive. (Reuters, http://www.reuters.com/article/us-pdvsa-output-idUSKCN10Q0D6)

 

Venezuela oil price rises for first time in 7 weeks

The price Venezuela receives for its mix of medium and heavy oil rose for the first time in 7 weeks as falling WTI prices bounced off a US$ 40 base.  According to figures released by the Ministry of Petroleum and Mining, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending August 12 was US$ 35.54, up US$ 2.18 from the previous week's US$ 33.56.  According to Venezuelan government figures, the average price in 2016 for Venezuela's mix of heavy and medium crude is now US$ 32.18 for the year to date. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2418651&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-crude-oil-hits-usd-3554-per-barrel_431529)

 

 

Commodities

Pharmaceutical guild warns of country facing dwindling medication inventories

Freddy Ceballos, President of Venezuela’s Pharmaceutical Federation, warns that unavailability of drugs in Venezuela spurs a breeding ground for the sale of illicit pharmaceutical products. He said the sale of illicit pharmaceutical products in Zulia state has been endorsed by state governor Francisco Arias-Cardenas. (El Universal, http://www.eluniversal.com/noticias/daily-news/pharmaceutical-guild-warns-country-facing-dwindling-drug-inventories_431510)

 

 

Economy & Finance

Maduro hikes minimum wage by 50% as inflation soars, small business endangered

President Nicolas Maduro has announced a 50% minimum wage hike that takes effect on Sept. 1, amid triple-digit inflation that has severely weakened spending power here. Monthly minimum wage will rise to 22,577 bolivars, around US$ 35 at the weaker of two official exchange rates but about US$ 23 at the black market rate. Including a 200% hike in meal tickets, it will rise to 65,056 bolivars, around US$ 101.17. "This is the third (minimum wage) hike this year," Maduro said during a televised broadcast. Critics say repeated salary increases are woefully insufficient to offset inflation, which reached 181 percent in 2015 according to official figures. The central bank has not published more up-to-date inflation figures, which opposition leaders say is meant to hide embarrassing economic data. The total full minimum wage, including meal tickets, has now risen 396.7% since January this year. Francisco Martínez, head of FEDECÁMARAS, Venezuela’s largest business federation, says the decree will have a negative impact and lead to closing many small and medium enterprises and the loss of jobs.  (Reuters, http://www.reuters.com/article/us-venezuela-economy-idUSKCN10O01Y; and more in Spanish: (Infolatam: http://www.infolatam.com/2016/08/14/maduro-aumenta-un-50-el-salario-minimo-venezolano-a-partir-de-septiembre/; Notitarde: http://www.notitarde.com/Fedecamaras-alerta-por-posible-cierre-de-pequenas-/Economia/2016/08/16/1017270/; El Universal, http://www.eluniversal.com/noticias/economia/ajuste-salarial-debe-unirse-aumento-produccion_431887)

 

How Venezuela’s repressive government controls the nation through hunger

The Venezuelan government has created unspeakable hardships for the populace and, at the same time, is taking advantage of those hardships to introduce new forms of political control. One would think that the proliferation of food lines would prompt riots. And some rioting is occurring. But food lines have paradoxically given the government new mechanisms for keeping protests at bay. Lines and rationing give the government the chance to extend Orwellian supervision. Retailers are being required to keep tabs on who buys what and how much. The government has installed fingerprint scanners in grocery and drug stores. Lines and scarcity give the government the chance to engage in new forms of favoritism. Only the government knows which stores will have which products, which controls food distribution, and it often discloses information only to those who are pro-government. Another form of favoritism has been the creation of government-run “committees” (CLAPs) that distribute groceries mostly to loyal groups. But the most important consequence of lines and rationing has been the increase in military control. Military personnel have been deployed to monitor food lines and supermarkets. They are there with the pretext of protecting citizens from crime, but what they are most successful in doing is repressing any protest that might emerge. (Huffington Post: http://www.huffingtonpost.com/javier-corrales/venezuela-government-hunger_b_11429014.html)

 

 

Politics and International Affairs

15 OAS states urge Venezuela to act on recall 'without delay'

A group of 15 countries called on Venezuela Thursday to act "without delay" to clear the way for an election over whether to recall President Nicolas Maduro from office as a way out of a worsening crisis. The countries, all members of the Organization of American States, issued the joint statement after the head of Venezuela's election authority laid out a schedule this week that appears likely to push any recall election into 2017. The timeline is crucial because if the unpopular Maduro is voted out in a recall election after January 10, he would simply yield power to his handpicked vice president. If the recall is held this year and Maduro loses, the constitution calls for new elections here. The opposition has been pressing for a recall this year, but the National Electoral Council has slow-rolled a complex petition process that involves gathering and validating millions of signatures before the elections can go ahead. "We call on the Venezuelan authorities to guarantee the exercise of the constitutional rights of the Venezuelan people and that the remaining steps for the realization of the presidential recall referendum be pursued clearly, concretely and without delay, and thus contribute to the quick and effective resolution of the current political, economic and social difficulties in the country," the joint statement said. Venezuelan Ambassador Bernardo Alvarez said he was surprised to learn of the joint statement, saying his counterparts were working "behind Venezuela's back" in what he called an "undiplomatic" act. The OAS members signing Thursday's statement urged the government and the opposition "to hold as soon as possible a frank and effective dialogue, directly or with the support of facilitators" to identify long-lasting solutions to the crisis. (AFP: https://au.news.yahoo.com/world/a/32308105/15-oas-states-urge-venezuela-to-act-on-recall-without-delay/#page1; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2418643&CategoryId=10718)

 

Only a presidential referendum can save Venezuela from its humanitarian crisis

Even as economic conditions continue their death spiral, street crime and violence are soaring, the last, best hope for a peaceful, institutional change of direction in Venezuela is an article in the constitution that allows for a recall referendum of the president. Over the past several months, the opposition has been collecting the signatures in a complex process to trigger such a referendum. Unsurprisingly, with polls showing that upward of 68% of Venezuelans would vote to remove Maduro, the electoral council he controls has been moving at a snail’s pace to process the opposition’s paperwork. That’s because, according to the constitution, if the government can delay the referendum until 2017, a No vote on Maduro would mean that his acolyte vice president would assume power for the rest of his term, rather than holding a new election, which would be required if the referendum was held this year. It is a race against time, but at least the international community is rousing to its importance. The secretary general of the Organization of American States, Luis Almagro of Uruguay, has led the charge, calling it the “only solution” to Venezuela’s crisis. The Obama administration is finally waking up to the fact that a major crisis is brewing in Venezuela, and that platitudes about “dialogue” no longer suffice. (National Review: http://www.nationalreview.com/article/438728/)

 

A looming clash in Venezuela, Peru’s Kuczynski points to recall referendum

Venezuela is on a dangerous — and avoidable — collision course. Despair and hunger in Venezuela have deepened in recent weeks as food shortages have worsened and international efforts to bridge the political divide have failed. Far from acknowledging the need for dramatic change, or even that his citizens are suffering, Maduro has continued to blame the nation’s unraveling on a conspiracy between the United States and the opposition. Avoiding a confrontation between the Venezuelan government and those seeking to oust Maduro, which could well turn violent, will require international backing for the ordinary citizens who are fighting to oust a despotic leader. “If there is a social implosion in Venezuela, that will reverberate through the entire region,” the opposition leader, Henrique Capriles, warned during a trip last week to Peru, during which he sought to enlist the help of Peru’s new president, Pedro Pablo Kuczynski. Capriles called on Latin American leaders to support the bid to hold a referendum this year. In his reply, Kuczynski emphasized that Venezuela’s constitution defines the recall process, which he called “a very important matter now”. (The New York Times: http://www.nytimes.com/2016/08/15/opinion/a-looming-clash-in-venezuela.html?emc=eta1&_r=0; and more in Spanish: El Universal, http://www.eluniversal.com/noticias/politica/presidente-kuczynski-reunio-con-capriles_431410; El Nacional, http://www.el-nacional.com/politica/Capriles-logro-reunirse-Kuczynski-Peru_0_901112649.html)

 

Argentina calls on Pope Frances to help dialogue in Venezuela

Argentina’s Foreign Minister Susana Malcorra says there could be a diplomatic initiative seeking a dialogue in Venezuela, including Pope Francis. Malcorra said “we are close to setting up a mechanism that can include an umbrella that will include the Vatican in a dialogue for Venezuela”, and said she met with the Pope last June and discussed this matter. She said the Pope “reiterated that he was willing to take part in a mechanism for mediation” to reach a dialogue between the Maduro regime and the opposition here. More in Spanish: (Noticiero Venevision:http://www.noticierovenevision.net/internacionales/2016/agosto/14/165843=argentina-pide-al-papa-francisco-intervenir-en-el-dialogo-en-venezuela)

 

Caracas appeals court rejects Lopez appeal, draws international condemnation

A Caracas court of appeals has rejected a motion by defense attorneys for imprisoned political leader Leopoldo Lopez, seeking to overturn his almost 14-year jail sentence in a military prison on charges of inciting violence. Lopez’s lawyer, Juan Carlos Gutierrez, says two more levels of appeal remain: within Venezuela´s Supreme Tribunal. Gutierrez said 14 forceful arguments were presented against the “illegal sentence” issued against him and three students last September 15, 2015. US Assistant Secretary of State for Latin America, Mari Carmen Aponte, said she was very worried over this action and asked the Venezuelan government to protect democracy and justice, The United States has insisted on liberating Lopez, which it considers a political prisoner. Luis Almagro, Secretary General of the Organization of American States (OAS) called the decision “a lost opportunity for reconciliation in Venezuela”; and Spain’s Foreign Minister José Manuel García Margallo said the decision “casts serious doubts on the workings of the rule of law in Venezuela”. He added that the Maduro regime “seems determined to dynamite all bridges for an understanding tithe the democratic opposition and block any possibility for a peaceful solution to a conflict that is devastating the country and causing enormous pain to Venezuelan citizens”. He said he would contact the European Union’s High Representative, Federica Mogherini, on this matter and ask Europe’s Foreign Affairs Council to reopen deliberation on Venezuela’s situation. (El Universal, http://www.eluniversal.com/noticias/daily-news/spanish-maduro-seems-ready-destroy-understanding-with-dissenters_431815; and more in Spanish: Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/agosto/12/165691=corte-de-apelaciones-ratifica-condena-de-leopoldo-lopez-a-casi-14-anos-de-prision; http://www.noticierovenevision.net/internacionales/2016/agosto/13/165767=eeuu-expreso-preocupacion-por-la-ratificacion-de-la-condena-contra-leopoldo-lopez; http://www.noticierovenevision.net/internacionales/2016/agosto/14/165807=margallo-sostiene-que-existen-)

 

Hard times in Venezuela breed malaria as desperate flock to mines

This country’s economic turmoil has brought malaria back, sweeping the disease out of the remote jungle areas where it quietly persisted and spreading it around the nation at levels not seen in Venezuela for 75 years. It all starts with the mines. With the economy in tatters, at least 70,000 people from all walks of life have been streaming into this mining region over the past year. As they hunt for gold in watery pits, the perfect breeding ground for the mosquitoes that spread the disease, they are catching malaria by the tens of thousands. Then, with the disease in their blood, they return home to Venezuela’s cities. But because of the economic collapse, there is often no medicine and little fumigation to prevent mosquitoes there from biting them and passing malaria to others, sickening tens of thousands more people and leaving entire towns desperate for help. Officially, the spread of malaria in Venezuela has become a state secret. The government has not published epidemiological reports on the disease in the past year, and it says there is no crisis. But the most recent internal figures, obtained from Venezuelan doctors involved in compiling it, confirm a surge is underway. In the first six months of the year, malaria cases rose 72%, to a total of 125,000, according to the figures. (The New York Times: http://www.nytimes.com/2016/08/15/world/venezuela-malaria-mines.html)

 

 

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.