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, November 10, 2016

November 10, 2016


International Trade

FEDECÁMARAS estimates international suppliers are owed around US$ 30 billion

Ricardo Cusanno, vice president of FEDECÁMARAS, the nation’s main business federation, estimates the debt owed to international suppliers is around US$ 30 billion, “which impacts the import cost of products”, and called government food imports from Brazil and Colombia “temporary solutions”. More in Spanish: (El Universal: http://www.eluniversal.com/noticias/economia/fedecamaras-calcula-que-deuda-proveedores-mil-millones_626216)

 

Port of Guanta: Over 900 tons of food and basic goods have arrived in 41 containers, along with Xmas products, consigned to government agencies, More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=34729; AVN; http://www.avn.info.ve/contenido/m%C3%A1s-900-toneladas-alimentos-arribaron-al-puerto-guanta)

 

Port of Puerto Cabello: 84 containers bearing toys have arrived, consigned to government agencies, as a part of basic and Xmas products arriving in Venezuela. (AVN; http://www.avn.info.ve/contenido/arribaron-84-contenedores-juguetes-puerto-cabello; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/arribaron-84-contenedores-de-juguetes-a-puerto-cab.aspx)

 

Oil & Energy

PDVSA pipeline break dumps 25,000 barrels of oil into rivers used for drinking water

In what is probably the largest oil spill in its history, Venezuelan state oil company PDVSA has reportedly lost between 24,000 to 100,000 barrels of oil after a main oil pipeline (36 inches or 91,44 centimeters in diameter) burst in Eastern Venezuela, an accident that spells more trouble for an already troubled company. PDVSA admitted to the spill that took place days earlier (the company is usually tight-lipped and slow to react in the face of such events), informed about the size of the pipeline and a contingency plan being activated to prevent the oil from “a crude leak” from reaching nearby bodies of water, but did not provide a figure in barrels for the spill. PDVSA produces some 2.1 million barrels a day, about half of which comes from the area of the spill, where the Eastern Division (Division Oriental) operates. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2424805&CategoryId=10717)

 

Venezuela claims oil agreement has been negotiated for OPEC Summit November 30

The Petroleum and Mining Ministry claims Venezuela agreed with Russia, Iran, Iraq, Qatar, Ecuador and the General Secretariat of the Organization of Petroleum Exporting Countries (OPEC) to arrange a deal among oil producers to reduce oil oversupply, to be struck at the next OPEC Summit scheduled for November 30. The Ministry says President Nicolás Maduro has called on his Russian, Iraqi, Iranian and Saudi Arabian counterparts to take “high level” decisions to implement an agreement to cut output reached in September in Algeria. (El Universal, http://www.eluniversal.com/noticias/daily-news/oil-agreement-negotiated-for-opec-summit-november_626393)

 

Commodities

Venezuela faces a complete shutdown of its auto industry

CONINDUSTRIA, Venezuela’s national industry council, is warning that the local auto industry faces a complete shutdown in 2017. Its current output has dropped by 91%. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/Conindustria-Venezuela-cierre-industria-automotriz_0_954504715.html)

 

Government run sugar mills have been inactive for the last three seasons

Small scale sugar growers in the South of Portuguesa state are warning PDVSA Agriculture that the 12 state run sugar mills may go inactive for the third season in a row, Tiburcio Barroeta, of the Caña Blanca cooperative says: “there is no funding for maintenance; boilers and mills remain untouched because the company contracted to make repairs has received no money”, They report that disrepair is impressive at the Río Guanare mill where they operate, which is the one in best shape. They add that there are about to be “three sugar crops that have gone unharvested and the people are without sugar” (Tal Cual: http://www.talcualdigital.com/Nota/134505/centrales-azucareros-del-gobierno-acumulan-tres-zafras-sin-molienda)

 

Economy & Finance

Economic Affairs minister claims credit ratings are economic sanctions in disguise

Economic Affairs Minister Carlos Faría says agencies that rate Venezuela as a high-risk nation are applying economic sanctions in disguise, and said those ratings did not follow any economic criteria because Venezuela and PDVSA have “punctually and in a disciplined manner” honored its obligations, adding that the ratings were “incomprehensible”. He said: “They impose very high interest rates and difficult conditions on us … the impose that type of disguised sanctions, but in the end they are sanctions”. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/economia/afirman-que-pais-cumple-sus-compromisos-externos_626084)

 

Legislature asks Central Bank and Statistics Institute to release official data immediately

The opposition majority block in Venezuela’s National Assembly has passed a resolution asking the Central Bank of Venezuela and the National Statistics Institute to “immediately” release official data inflation, Gross Domestic Product (GDP), balance of payments, food basket prices, and poverty rates. They also asked the government to adjust salaries and pensions, in keeping with an economic approved by the legislature in April, which is termed “Ten proposals to solve the economic crisis”. Additionally, the legislature called on the government to accept humanitarian aid including food and medicines to assist the most vulnerable sectors of society. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-parliament-asks-bcv-ine-release-official-data-immediately_626341)

 

October inflation was 19.1%

A source close to the Central Bank has reported their consumer price index registered 19.1% for the month of October. Year to date inflation was pegged at 525.4% and projected 2016 inflation is 755.9%, the highest ever registered in Venezuela. August inflation was 26.9% and September inflation was 21.6%. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/Inflacion-octubre-ubico_0_955104721.html)

 

Supreme Tribunal refuses to rule on PDVSA bond payments in local currency

PDVSA must make its 2016, 2017 and other pending bond payments in US dollars, as originally established. Venezuela’s Supreme Tribunal has refused to as much as review a request by Corporación XT-46 for the court to determine whether such payments could be made in bolivars. More in Spanish: (El Universal: http://www.eluniversal.com/noticias/economia/tsj-rechazo-aclarar-pdvsa-puede-pagar-sus-bonos-bolivares_626207)

 

Politics and International Affairs

Government-opposition dialogue to continue amid debate, Capriles says military should join

Vatican brokered talks between the Maduro regime and the Democratic Unity opposition coalition are scheduled to convene again on November 11th, to follow up four working groups set up during the preliminary meeting. Former presidential candidate and opposition leader Henrique Capriles Radonski has said it would be useful if Defense Minister General Vladimir Padrino Lopez would take a seat at the table in place of Downtown Caracas Mayor Jorge Rodríguez, or his sister, Foreign Minister Delcy Rodríguez. Capriles said “The Armed Forces are today involved in practically all areas…I think it important that they are represented there. The Armed Forces have a role to play in any dialogue process”. He insisted that the “crisis will not be resolved until the people can vote” and asked Venezuelans to demand results after the talks tomorrow. He added that the opposition is entering talks with a clear agenda and “if the government again mocks the people of Venezuela, we will undertake the planned agenda” of protests. He said that “the opposition is not responsible for the country’s economic plight because the damage is to the government’s model”. Falcón state governor Henri Falcón said the coalition will not abandon talks, and that “it is expected there will be concrete results from the upcoming plenary” meeting. Freddy Guevara, National Coordinator for the Voluntad Popular party says the key issue is “a date for new presidential elections, whether through a recall referendum or moving up elections”. Tomás Guanipa, Executive Secretary of the Primero Justicia party, says talks should continue but must have a time limit. Former Ambassador Roy Chaderton, one of the government representatives at the talks, said both sides should “lower the tone” of their speech, and criticized private media. Pro government legislator Elías Jaua, also a member of the government group in the dialogue, said elections would not be moved forward and that they would “not discuss anything that is outside the Constitution”. Newly appointed Cardinal Baltazar Porras said that the “dialogue does not seek political benefits, but rather social benefits”; he added that one must not enter a dialogue and then “disqualify” and called for participants to maintain an adequate tone. More in Spanish: (El Nacional: http://www.el-nacional.com/politica/Capriles-sugirio-Padrino-Lopez-incorpore_0_954504839.html; El Universal, http://www.eluniversal.com/noticias/politica/capriles-noviembre-vamos-reunion-con-una-agenda-clara_626290; http://www.eluniversal.com/noticias/politica/guevara-ratifica-que-dialogo-debe-ser-para-convocar-elecciones_626004; http://www.eluniversal.com/noticias/politica/tomas-guanipa-dialogo-puede-tener-tiempo-ilimitado_626015; http://www.eluniversal.com/noticias/politica/baltazar-porras-dialogo-debe-buscar-beneficio-social-politico_625988; Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/noviembre/8/174911=gobernador-henri-falcon-asegura-que-oposicion-venezolana-no-dejara-el-dialogo; http://www.noticierovenevision.net/politica/2016/noviembre/7/174806=tomas-guanipa-considera-que-el-dialogo-no-debe-tener-un-tiempo-ilimitado; http://www.noticierovenevision.net/politica/2016/noviembre/7/174772=diputado-jaua-niega-que-vayan-a-convocarse-elecciones-adelantadas-en-el-pais; El Mundo, http://www.elmundo.com.ve/noticias/actualidad/noticias/chaderton--tanto-el-estado-como-la-oposicion-deben.aspx#ixzz4PPjVEBsH)

 

Attorney General files suit against legislature here

Acting Attorney General Reinaldo Muñoz has announced he has filed an injunction against the National Assembly with Venezuela's Supreme Tribunal (TSJ) over "recent actions against the Constitution." He claimed those actions include an "alleged impeachment against President Nicolas Maduro which is nonexistent in the Constitution" and well as promoting violent street action such as those in 2002 and 2014. Additionally, he asked the Court to block any efforts to replace TSJ magistrates and directors of the National Electoral Council (CNE).  National Assembly President Henry Ramos Allup insists that the legislature has the right to declare the President “politically responsible” and that the process was temporarily put on hold during talks. He made it clear that the procedure is not an impeachment, as claimed by government spokespeople. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2424955&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-government-accuses-opposition-led-national-assembly-plot_626419; and more in Spanish: http://www.noticierovenevision.net/politica/2016/noviembre/9/175093=ramos-allup-reitera-potestad-del-parlamento-para-declarar-responsabilidad-politica-del-presidente-

 

Venezuela congratulates Donald Trump on triumph in US elections

The Venezuelan government congratulated the US President-elect Donald Trump, and called for a move forward a new stage in bilateral relations based on respect for sovereignty, self-determination, and peace. “The Bolivarian Republic of Venezuela hopes that in this new phase for the North-American nation, new paradigms may be established with our region, as based on the recognition of cultural, social and historical identities of our countries, as well as the observance of non-intervention in internal affairs, the right to development and peace,” it said in a communiqué issued by the Foreign Ministry here. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuela-praises-donald-trumps-triumph-elections_626442)

 

El Aissami says Venezuela maintains “anti-imperialist principle” after Trump win

Following Donald Trump’s election, Aragua state governor Tareck el Aissami twitted that Venezuela maintains the “anti-imperialist principle” and called on the US government to end the what he called the “attack” coming from Washington. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/noviembre/9/175030=el-aissami-manifesto-que-venezuela-mantiene-la-“conviccion-antiimperialista”-tras-las-victoria-de-trump)

 

Maduro to speak with US Secretary of State

President Nicolás Maduro has referred recent talks held with US government officials, including Thomas Shannon and John Kerry, Under Secretary and Secretary of State, respectively. He said: “I have a pending conversation with Kerry, whatever happens in the elections”. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-maduro-speak-with-secretary-state_626395; and more in Spanish: Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/noviembre/8/174908=presidente-maduro-informo-que-conversara-en-los-proximos-dias-con-john-kerry)

 

What does Trump victory mean for Venezuela?

The only candidate that indicated a plan to defend democracy in Venezuela is now President-elect of the United States. What are the implications for embattled President Nicolas Maduro, trying to cling to power with more than 80% of the country against him? Analysts in the US and Caracas say that the Trump White House could undertake a more aggressive foreign policy against Venezuela, with sanctions included, while some see a new President focused more on domestic issues, bordering on isolationism. “Now we can expect increased pressure from the US,” says Professor Greg Weeks, Professor and Chair of the Department of Political Science & Public Administration at the University of North Carolina in Charlotte. “Trump will probably impose sanctions” on Venezuela. During the campaign, Trump made more references to Venezuela than Clinton, saying things like “Venezuela is a beautiful, vibrant, and resource-rich country, filled with amazing and hardworking people. But Venezuela has been run into the ground by socialists,” in September. “The next President of the United States must stand in solidarity with all people oppressed in our hemisphere, and I will stand with the oppressed people of Venezuela yearning to be free,” Trump said in October. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2424969&CategoryId=10717)

 

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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