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, December 29, 2016

December 29, 2016


International Trade

Food and construction material have arrived at El Guamache port from Jamaica

503 tons of food in 24 containers bearing rice, pasta, oil, lard, wheat and sauces have arrived from Jamaica into El Guamache port in Anzoátegui state; along with 77 containers bearing 1774,43 tons of construction material, and another 44 containers with miscellaneous products. More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=34877)

 

Cuba says economy shrank this year in tandem with Venezuela crisis

Cuba's economy shrank 0.9% this year in tandem with the crisis in key trading partner Venezuela, President Raul Castro told the National Assembly in a closed-door speech, predicting a slightly brighter outlook for 2017. The figure suggests sharp economic contraction in the second half after the cash-strapped government slashed imports, investment and fuel in response to lower exports and a drop in cheap oil deliveries from Venezuela. "Restrictions in cash and in the provision of fuel worsened in the second half," Castro said. "Financial tensions and challenges that might intensify again in certain circumstances will persist, but we hope that gross domestic product (GDP) will grow moderately, by around 2% (in 2017)." Key ally Venezuela has slashed its provision of cheap oil and the drop in global commodities prices is punishing Cuban exports of nickel, refined oil products and sugar. (Reuters: http://www.reuters.com/article/us-cuba-economy-idUSKBN14G1E0)

 

Oil & Energy

 
PDVSA to cut oil production, reduce sales volume to its clients

State oil company Petroleos de Venezuela (PDVSA) has announced that the volume of sales stipulated in main crude oil sale contracts would be reduced by January 1, 2017 “in compliance with the terms and conditions of their valid contracts.” According to PDVSA’s official website, the decision is grounded on the production cut of 95,000 barrels per day (bpd) approved by the Organization of Petroleum Exporting Countries (OPEC) last November 30 in Vienna. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-pdvsa-reduce-sales-volume-its-clients_632933; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2427960&CategoryId=10717)

 

Oil Minister claims CITGO still belongs to Venezuela

Eulogio del Pino, Oil Minister and President of state oil company Petroleos de Venezuela (PDVSA), has denied that PDVSA has pledged its US subsidiary CITGO, and explained that it had only used it as collateral for bond swap operations. On December 23, a report showed that PDVSA had mortgaged CITGO to Russian oil company ROSNEFT.
Minister Del Pino says PDVSA used 51% of CITGO’s capital as a collateral to motivate bondholders in bond swap operations. The remaining 49% was used for new financing. (El Universal, http://www.eluniversal.com/noticias/daily-news/citgo-belongs-venezuela-oil-minister-confirms_632928; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2427926&CategoryId=10717)

 

Commodities

 
Venezuela military trafficking food as country goes hungry

President Nicolas Maduro has turned to the military to manage the country's diminished food supply, putting generals in charge of everything from butter to rice. But instead of fighting hunger, the military is making money from it. With much of the country on the verge of starvation and billions of dollars at stake, food trafficking has become one of the biggest businesses in Venezuela. And from generals to foot soldiers, the military is at the heart of the graft. As a result, food is not reaching those who most need it. The U.S. government has taken notice. Prosecutors have opened investigations against senior Venezuelan officials, including members of the military, for laundering riches from food contracts through the U.S. financial system. When people responded to scarcity with violent street protests, Maduro handed the generals control over the rest of food distribution, and the country's ports. The government now imports nearly all of Venezuela's food, and corruption is rampant, jacking up prices and leading to shortages. The Food Ministry's annual report shows significant overpayments across the board, compared to market prices. And the prices the government pays for imported foods have been increasing in recent years, while global food prices remain stable. Internal budgets from the ministry obtained by AP show the overpayment continues. By putting the military in charge of food, Maduro is trying to prevent soldiers from going hungry and being tempted to participate in an uprising against an increasingly unpopular government. However, it also opened the door to widespread graft and further squeezed the food supply. The three largest global food traders — U.S.-based Archer Daniels Midland Co., Bunge Ltd. and Cargill — have stopped selling to the Venezuelan government, largely due to concerns of corruption following the government's takeover of the food industry, A major scam involves the strict currency controls that have been a hallmark of the administration. The government gives out a limited amount of coveted U.S. currency at a rate of 10 bolivars to the dollar. The holders of licenses to import food are among the select few who get to buy dollars at the vastly cheaper rate. Some officials distribute these much-desired licenses to friends. The friends then use only a fraction of the dollars to import food, and share the rest with the officials. Some contracts go to companies that have no experience dealing in food or seem to exist only on paper. From time to time, the government carries out raids of warehouses holding smuggled goods and arrests lower-ranking military officers accused of graft. And yet the corruption persists from the port to the markets. Sometimes the officials who control access to the docks keep ships waiting until they are paid off. After ships unload their cargo, customs officials take their share. Bribes are also required for any missing paperwork. Rotting food is also a problem even as 90%t of Venezuelans say they can't afford enough to eat. In some cases, partners buy food that is about to expire at a steep discount, then bill the government for the full price. When the food is no longer usable, the military tries to get rid of it quietly. Just as bribes are needed to get food into the port, they are also required to move food out, truckers said. The roads near the port are lined with trucks waiting to be let in. When the food is finally loaded onto the trucks, soldiers come by to take a cut. On the roads, truck drivers face an obstacle course of military checkpoints. Truckers say soldiers at about half the checkpoints demand bribes. The surest way to move food through the network of checkpoints is to transport it under military guard. For a percentage of the product's value, military officers on the take will assign a moonlighting soldier to ride along in the truck. Sugar and flour are among the items most in demand because they have become virtually impossible to find legally, and some businesses, like bakeries, cannot function without them. The theft extends to the very end of the food supply chain. At one market in Valencia, the military members who were appointed in August to stop contraband confiscated vendors' produce. They said the vendors did not have the right permits. The food was piled in an olive-green cargo truck. In Puerto Cabello, hungry residents said it feels like corrupt soldiers are taking food off their children's plates. (Associated Press: https://apnews.com/64794f2594de47328b910dc29dd7c996/Venezuela-military-trafficking-food-as-country-goes-hungry)

 

Economy & Finance

 
Private sector lost 1 million jobs during 2016, another half million jobs at risk

According to the National Workers Union (UNETE), one million private sector jobs were destroyed during 2016 due to the government’s erratic economic and labor policies. UNETE’s coordinator Servando Carbone says “uncertainty remains that due to worsening conditions in 2017 more companies and businesses will close, placing another 500,000 jobs at risk”. More in Spanish: (El Nacional, http://www.el-nacional.com/noticias/economia/sector-privado-perdio-millon-empleos-2016_73028)

 

Venezuela must pay out US$ 6.4 billion due in debt service during 2017

TORINO Capital estimates that Venezuela must pay out US$ 6.4 billion in debt service during 2017, and will required US$ 6.6 billion in outside financing. They believe that renewing part C of the China-Venezuela Mixed Fund, US$ 5 billion, would get “most of the job done”. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/economia/estiman-que-amortizacion-2017-destinara-millardos-pagos-bonos_633019)

 

Politics and International Affairs

 
OAS asks Maduro regime not to interfere in Congress board appointment

Luis Almagro, Secretary General of the Organization of American States (OAS), has called on the Maduro regime not to interfere in the appointment of the opposition-led Congress authorities, warning that it would be “one more step towards the consolidation of an authoritarian regime.” “Any interference in the appointment of the AN (National Assembly) by the Executive Office or the Judiciary means full disregard of the essential principles of democracy, namely separation and independence of powers,” Almagro said in a communiqué. According to the document, interference from other powers in the Congress internal procedures would put “aside the legitimacy the Venezuelan people granted to the AN.” (El Universal, http://www.eluniversal.com/noticias/daily-news/oas-asks-venezuelan-govt-not-interfere-congress-board-appointment_632931)

 

Maduro regime says it will continue dialogue in 2017, will not tolerate opposition “violence

Downtown Caracas Mayor Jorge Rodríguez, one of the Maduro regime’s representatives at the Vatican sponsored talks with the opposition, says that pro government representatives will maintain the political dialogue during 2017 and will not tolerate acts of “violence” by the Democratic Unity (MUD) opposition coalition. The MUD has notified the Vatican that there are no conditions for a dialogue once the government reneged on commitments made during the past session. New meetings had been scheduled for January 13th.  More in Spanish: (Infolatam: http://www.infolatam.com/2016/12/28/chavismo-dice-seguira-dialogo-2017-no-permitira-violencia-opositora/)

 

Maduro calls on the military to set up a new “intelligence” system in 2017

President Nicolás Maduro has called on the armed forces here to set up a new “strategic, proactive and popular” intelligence system to counteract threats and attacks before they occur, and accused paramilitaries and criminals of causing recent food riots at several locations. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/maduro-llamo-fan-construir-sistema-inteligencia-2017_633003)

 

U.S.-Venezuela relations will probably deteriorate under Trump. Ask ExxonMobil why.

President-elect Donald Trump recently nominated ExxonMobil CEO Rex Tillerson to be secretary of state. That company and Venezuela have been hostile toward each other over the past decade — which means Tillerson’s nomination suggests that the United States and Venezuela have a tense relationship ahead. In 2007, Venezuela tried to buy majority stakes in all oil ventures within its borders. Although most corporations accepted the deals offered by the government, ExxonMobil and ConocoPhillips rejected them. When the government offered to pay ExxonMobil the book value for its assets, the company asked for what it considered the market value. As a result of the disagreement, Chávez sent state oil workers, along with members of the military, to seize ExxonMobil facilities that May. ExxonMobil had transferred its Venezuelan holdings to a subsidiary based in the Netherlands. And so ExxonMobil sought international arbitration based on a bilateral investment treaty between the Netherlands and Venezuela, within the World Bank’s International Center for Settlement of Investment Disputes. In October 2014, ICSID ordered Venezuela to compensate ExxonMobil for US $1.6 billion. Because ExxonMobil had requested nearly US$ 15 billion, Venezuela claimed a victory. Less than a year later, ExxonMobil directly confronted the Venezuelan government in Guyana. For more than 100 years, the Venezuelan and Guyanese governments had both claimed the territory known as the Essequibo, which borders both countries — and for decades, no oil companies explored it. But in May 2015, ExxonMobil announced that it had discovered oil reserves off the coast of the disputed region and would work with the newly elected Guyanese president, David Granger, to extract the Essequibo’s resources. Maduro announced that ExxonMobil was trying to destabilize peace in the region by siding with Guyana, and the Venezuelan military began to hold exercises along the disputed border. In an interview in July 2015, Maduro asserted that there: “is a brutal campaign against Venezuela, financed by ExxonMobil. It’s a campaign to corner Venezuela, to lead it to high-intensity conflict [with Guyana], to undermine the policy of peace that we have implemented.” For its part, ExxonMobil has repeatedly complained about the Venezuelan government to U.S. diplomats stationed around the globe. Given Tillerson’s background at ExxonMobil, we can expect the Trump administration to take an aggressive stance toward Venezuela. This may include sanctions on more Venezuelan state officials and even an end to high-level diplomatic meetings. Expect more friction over the next few years. (The Washington Post: https://www.washingtonpost.com/news/monkey-cage/wp/2016/12/29/u-s-venezuela-relations-will-likely-deteriorate-under-trump-ask-exxonmobil-why/?utm_term=.f074ac99eb31)

 

Venezuelans hawk snacks on Dominican streets as revolution dies

This is not the life Edgar Leon hoped for when he voted for the socialist revolution of Hugo Chavez in Venezuela -- standing on a street corner in the Dominican Republic selling snacks and lemonade out of a bucket to support his wife and children back home. “We were a rich nation,” said Leon. “This is an embarrassment. I never wanted to leave my country.” He’s one of the record number of Venezuelans who arrived in the Dominican Republic this year, escaping chronic shortages and spiraling prices back home. But these latest emigrants aren’t the Venezuelan doctors, lawyers and university students of the kind who can be found working in cities from Santiago to Miami. The streets of Santo Domingo are hosting a new group of emigrants -- the very people who were meant to benefit from subsidized food, cheap housing, labor protection and free education guaranteed by Chavez’s government. (Bloomberg, https://www.bloomberg.com/news/articles/2016-12-28/venezuelans-hawk-snacks-on-dominican-streets-as-revolution-dies)

 

Hunger is driving up crime in Venezuela as violence hits new highs

Venezuela’s violence hit new peaks in 2016 amid a breakdown in the law enforcement and judicial systems and a spike in hunger-related crimes. According to the Observatory of Venezuelan Violence, or OVV, this country saw at least 28,479 violent deaths this year for a total of 91.8 deaths per 100,000 residents. If the number proves accurate, Venezuela would have the second-highest homicide rate in the world after El Salvador and ahead of Honduras. In its annual report, the group said that Venezuela’s judiciary had shed all vestiges of independence and was being used as a political bludgeon. In addition, increased poverty and shortages “had promoted increased violence in the country.” Also, for the first time, the group said it had observed “the presence of hunger-related generalized violence.” With the nation suffering from both hyperinflation and food shortages, looting of supermarkets and food trucks has become almost a regular occurrence. In addition, criminals are becoming more brazen, using hand grenades and military-issue automatic weapons in their crimes, the report found. Police have been particularly hard hit by the violence. In the capital alone, there was an average of 2.5 police murders each week, the report found. “At the same time, we’ve observed an increased number of police who are involved in crimes,” the study added. The Miami Herald: http://www.miamiherald.com/news/nation-world/world/americas/venezuela/article123341959.html#storylink=cpy

 

In Venezuela, lynching kills one person every three days

Roughly one person is being lynched in crisis-ridden Venezuela every three days as frustrated residents take revenge on suspected criminals, a monitoring group said on Wednesday. The Venezuelan Observatory of Violence (OVV), which monitors crime, said mob killings have become a generalized phenomenon across the country, with 126 deaths reported in 2016 versus 20 last year. "Due to being repeated victims of crime for more than a decade, and the feeling of not being protected, many people have decided to take justice into their own hands," the OVV said in its latest annual report. In the past, it said, lynching of suspected murderers and rapists were relatively uncommon, but this year angry crowds have increasingly attacked petty criminals too, with police often turning a blind eye. The OVV, a group of academics who compile data from police sources and the media, said Venezuela, with an estimated 28,479 homicides this year - or more than three killings per hour - was the world's second most murderous nation after El Salvador. That would represent 91.8 murders per 100,000 inhabitants this year, up from 90 in 2015, it said. The OVV put the homicide rate at more 140 per 100,000 people in Caracas, making it one of the murder capitals of the world.  President Nicolas Maduro's socialist government rejects the OVV figures as inflated for political reasons. Whatever the right statistics, crime remains an all-pervasive worry for Venezuelans, especially in poor slums that are run by gangs and rife with guns. Numerous state security plans and disarmament drives have failed to curb the problem. "Violence is killing the future of our country," opposition leader Henrique Capriles said during a visit on Wednesday to rescue services in the Miranda state, which he governs. "The government has spent 17 years without resolving the problem," he added, referring to Maduro and his predecessor Hugo Chavez's rule since 1999. (Reuters: http://www.reuters.com/article/us-venezuela-violence-idUSKBN14H1PJ)

 

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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    Replies
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  20. WE OFFER ALL KIND OF LOANS - APPLY FOR AFFORDABLE LOANS.
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  21. WE OFFER ALL KIND OF LOANS - APPLY FOR AFFORDABLE LOANS.
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  22. DO YOU NEED A LOAN TO START A BEFITTING NEW YEAR!!!!!!

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  23. Are you in need of a loan? Do you want to pay off your bills? Do you want to be financially stable? All you have to do is to contact us for more information on how to get started and get the loan you desire. This offer is open to all that will be able to repay back in due time. Note-that repayment time frame is negotiable and at interest rate of 3% just email us creditloan11@gmail.com

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  24. Good Day Dear Loan Seeker,

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  26. DO YOU NEED A LOAN TO START A BEFITTING NEW YEAR!!!!!!

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  27. Hello
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    ReplyDelete

  28. We are a Finance Industry Company professionals with over 15 Years Experience and a focus on providing Bank Guarantee and Standby Letter of Credit from some of the World Top 25 Prime Banks primarily from Barclays, Deutsche Bank, HSBC,Credit Suisse e.t.c.

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    ReplyDelete
  29. DO YOU NEED A LOAN TO START A BEFITTING NEW YEAR!!!!!!

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  32. LOAN OFFER!!!

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  34. Good Day Dear Loan Seeker,

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  38. DO YOU NEED A LOAN TO START A BEFITTING NEW YEAR!!!!!!

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  39. vHOW I GOT LOAN FROM KENDRICK INVESTMENTS LIMITED.

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    ReplyDelete
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  44. Attention Please:Are you worry about you debts Are You Financially down ? Do you need a loan to pay off your bills or buy a home Or Increase your Business ? Apply for a loan now and get approved. We offer all kinds of loan at a reduced interest rate of 3%. Our loan program is very direct and flexible as Your Satisfaction and Financial Success is our Aim. IF INTERESTED, for more info do contact us now via Email: ( johnlambservicelimited@gmail.com)

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  47. i want to appreciate mr westhood of apexloans for giving me a loan. i have being scammed 6000euro by different scammer. and i applied for a loan from apexloans and i got my loan. if you need a legit loans today apply via email: apexloans@yahoo.com

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  48. Hello i am Janet clerk,i live in Georgia U.S.A and i am a single mom,i had financial problem and it was very bad but thank God for this private lender Mr Angga Diman who helped me with a loan of 30,000usd and now we are good all thanks to Mr Angga Diman.

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  49. Good Day Dear Loan Seeker,

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  50. My name is melanie cassey. First I was skeptical about the loan on the internet. I've had a bad experience when I was looking for a loan log. But a friend advised me to person. Credit processing and everything else went so fast and easy. I have credit and I can smile. If you are looking for a loan or looking for, contact me. I will provide information about the person who will be able to help you contact via e-mail
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  51. Are you an individual businessman or a business organisation that wishes to expand in business ??, we offer financial instrument such as BGs, SBLCs,MTNs, LCs, CDs and others on lease and sales at a rate of 4%+2% of the face value and reasonable conditionfrom a genuine provider. You are at liberty to engage our leased facilities into trade programs as well as in signatory project(s) such as Aviation, Agriculture, Petroleum, Telecommunication and any other project(s) etc.

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  52. DO YOU NEED A LOAN TO START A BEFITTING NEW YEAR!!!!!!

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  58. Good Day Dear Loan Seeker,

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  59. DO YOU NEED A LOAN TO START A BEFITTING NEW YEAR!!!!!!

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  60. Hello, The true human beings are those who know how to come to the rescue of their fellow men when they suffer. This lady made me a loan of 50,000 € without any.Complicate the task at the level of the documents that banks ask for when applying for loans. If you are in financial need, thanks to it I have today The super market of the corner she was my savior and really I do not know what to do to her that is why I decided today to testify in her favor you can .Contact him by email and follow his instructions and you will be satisfied in 48 hours maximum. I confirm it and from this moment if you happen that you need a Please contact her. So you who are in need like me you can write to him and explain to him your situation he could you
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  61. Attention Everyone: I am Lisa randy, I am using this medium to inform the general public about how my life got transformed I was in search of a business loan, Until a Friend of mine introduced me to BARCLAYS BANK PLC. At first I told her I was not interested in any loan deal with banks or any private loan company anymore then she assured me that the bank is a genuine one, though i never believed her, I made a trial and I am glad i did, I was given a loan of $80,000.00 by this bank on 10th of February 2017. My advice to anyone who requires a genuine, legit loan or any financial assistance that can be reliable, trusted and capable of paying back at the due time of the funds should Contact them if you are interested via email: EMAIL VIA:barclays.bankplc3@aol.com


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  62. Attention Everyone: I am Lisa randy, I am using this medium to inform the general public about how my life got transformed I was in search of a business loan, Until a Friend of mine introduced me to BARCLAYS BANK PLC. At first I told her I was not interested in any loan deal with banks or any private loan company anymore then she assured me that the bank is a genuine one, though i never believed her, I made a trial and I am glad i did, I was given a loan of $80,000.00 by this bank on 10th of February 2017. My advice to anyone who requires a genuine, legit loan or any financial assistance that can be reliable, trusted and capable of paying back at the due time of the funds should Contact them if you are interested via email: EMAIL VIA:barclays.bankplc3@aol.com


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  63. Attention Everyone: I am Lisa randy, I am using this medium to inform the general public about how my life got transformed I was in search of a business loan, Until a Friend of mine introduced me to BARCLAYS BANK PLC. At first I told her I was not interested in any loan deal with banks or any private loan company anymore then she assured me that the bank is a genuine one, though i never believed her, I made a trial and I am glad i did, I was given a loan of $80,000.00 by this bank on 10th of February 2017. My advice to anyone who requires a genuine, legit loan or any financial assistance that can be reliable, trusted and capable of paying back at the due time of the funds should Contact them if you are interested via email: EMAIL VIA:barclays.bankplc3@aol.com


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  64. Good Day Dear Loan Seeker,

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    ReplyDelete
  65. Good Day Dear Loan Seeker,

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  68. How I Got My Loan From Kendrick Investments Limited

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  69. How I Got My Loan From Kendrick Investments Limited

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  96. How I Secured A Loan From Kendrick Investments Limited

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  102. Testimony on how i got my LOAN from fundingloanplc@yahoo.com ...

    I'm Isabella Tyson from 1910 N Halsted St Unit 3, Chicago IL60614 USA,, i have been searching for a genuine loan company for the past few months and all i got was bunch of scams who made me to trust them and at the end of the day took my money without giving anything in return, all hope was lost i got confused and frustrated, i find it very difficult to feed my family and vowed never to have anything to do with loan companies on net and went to seek of assistance from a very good friend which i explained all my experience regarding online companies with and said he can help me that he knows of a Godsent and well known company called FUNDING CIRCLE PLC, he stated he just got a loan from them although i was still very unsure about this company due to my past experience but i decided to give it a try and did as i was directed by my friend and applied, i never believed but i tried and to my greatest surprise i received my loan in my bank account within 24 hours, i could not believe that i would stand on my feet financially again. I’m glad I took the risk and applied for the loan and today i'm thanking God that such loan companies still exist and promise to share the good news to people who are in need of financial assistance because the rate of scams on net is getting very serious and i don't want people to fall victim when we still have genuine and Godsent lenders.. You can contact this Godsent company using the information as stated and be a partaker of this great testimony.. Email: fundingloanplc@yahoo.com OR Call/Text +14067326622 thanks


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