September 05, 2019

International Trade

Venezuela bans agricultural imports from Colombia for fear of Fusarium

Venezuela's Institute of Environmental Health (INSAI) published a statement of transboundary phytosanitary risks in which they propose preventive measures to prevent the spread of the Fusarium oxysporum f. sp. Cuban tropical 4 race fungus or Foc R4T in the plantations of musaceae. The measures include the temporary prohibition of the entry of propagation material of any plant species, or any means that transports soil or traces, as well as banning imports and import procedures for any agricultural product from Colombia. They also suggested that the officials of INSAI and the Territorial Agricultural Committees intensify phytosanitary surveillance in the border states, Barinas, Trujillo, Falcon, Lara and Merida; deploying at least 40 agronomists and military personnel in border areas of Zulia, and increasing the number of technical personnel in ports and airports to inspect ships, aircraft, and luggage from Colombia. Finally, they recommend fumigating the vehicles entering Venezuela with 20% quaternary ammonium or a similar disinfectant, and reinforcing the National Program for Prevention, Detection, Management, and Control. (Fresh Plaza: https://www.freshplaza.com/article/9140543/venezuela-bans-agricultural-imports-from-colombia-for-fear-of-fusarium/)

 

Oil & Energy

SINOVENSA works halted on PDVSA arrears

Chinese contractor HUANQIU Contracting and Engineering has suspended a project to expand Venezuela's SINOVENSA crude blending plant because of overdue payment. SINOVENSA is a joint venture led by Venezuelan state-owned PDVSA with a 51% stake, and China's state-owned CNPC with 49%. The plant is one of the few oil-processing facilities in Venezuela that has sustained operations despite a host of problems, including US sanctions that impede the supply of spare parts, power outages and equipment breakdowns and theft. SINOVENSA produces 16ºAPI Merey crude by blending extra-heavy crude from the Orinoco heavy oil belt's Morichal district with domestic light grades. The production is exported, mainly to China. In a 3 September letter seen by Argus, HUANQUI's senior executive in Venezuela Liang Qiang notified SINOVENSA project manager and CNPC official Zhao Xiongfei that construction of "complementary works" associated with SINOVENSA's capacity expansion from 105,000 b/d to 165,000 b/d would be suspended immediately pending full payment of two invoices totaling US$ 52 million issued in November 2018 and February 2019 . (Argus Media: https://www.argusmedia.com/en/news/1972352-sinovensa-works-halted-on-pdv-arrears?backToResults=true)

 

CITGO Petroleum cash builds, with dividends to parent frozen

CITGO Petroleum Corp, the U.S. refining arm of Venezuela’s state oil company, is accumulating hundreds of millions of dollars in cash it may not be able to pay out as dividends for at least a year, according to a new report by ratings firm S&P Global. The refiner had US$ 1.36 billion in cash at June 30 and should generate another US$ 1.4 billion in funds from operations over the next 12 months, the report said. S&P last week raised CITGO’s stand-alone credit profile to BB from BB-minus, reflecting its stronger liquidity. Some Venezuelan politicians were expecting Citgo, as the county’s largest foreign asset, to help finance Congress chief Juan Guaido’s interim government. The United States and most Western countries have recognized Guaido as Venezuela’s legitimate leader, although President Nicolas Maduro retains control of state-run Petroleos de Venezuela, S.A., known as PDVSA, and the nation’s military. (Reuters, https://www.reuters.com/article/us-citgo-petroleum-debt/citgo-petroleum-cash-builds-with-dividends-to-parent-frozen-idUSKCN1VO2TN)

 

Economy & Finance

Gold reserves fall to 75-year low as Guaido seeks to restructure debt

Venezuelan gold reserves have fallen to a historic low, Venezuela’s Central Bank revealed last week. According to official data, the value of gold bars held in the Central Bank vaults have declined to US $4.62 billion, down 18.5% from US$ 5.67 billion at the end of 2018. Venezuela currently has 102 tons of gold reserves, but a third of the total is being held by the Bank of England, which has refused to repatriate it back to Venezuela. In January, opposition leader Juan Guaido wrote a letter to the Bank of England asking it not to return the gold to Venezuelan coffers. In the subsequent seven months, the National Assembly president has repeatedly tried to seize power and form a transition government. Most recently, Guaido announced Tuesday that his office will contract US law firm Sullivan & Cromwell LLP as lead counsel for negotiations to restructure Venezuela’s foreign debt. (Venezuela Analysis: https://venezuelanalysis.com/news/14647)

 

Venezuela's Armed Forces Bank slams MASTERCARD for halting card service

A Venezuelan bank run by the troubled country’s military on Wednesday slammed MASTERCARD for cutting off service to the bank’s credit cards following U.S. sanctions against the government of President Nicolas Maduro. The measure is another sign of how U.S. sanctions are affecting the functioning of Venezuelan state institutions. But the practical impact is limited because the bank is small and hyperinflation has reduced use of credit cards, whose credit limits rarely keep up with price increases. MASTERCARD also halted services to state-run Agricultural Bank. Phone numbers published on that bank’s website were disconnected. (Reuters: https://www.reuters.com/article/us-venezuela-politics-mastercard/venezuelas-armed-forces-bank-slams-mastercard-for-halting-card-service-idUSKCN1VQ02Y)

 

Politics and International Affairs

Maduro deploys air defenses to Colombian border amid attack fears, orders military exercises

Nicolas Maduro is deploying missile defenses along Venezuela’s border to ward off a potential attack launched under false pretenses, he announced after declaring an “orange alert” over the Colombian threat. Maduro ordered the deployment of Venezuela’s missile defense system and commanded the military to patrol the Colombian border for two weeks starting on September 10, without specifying any details. Earlier he declared an “orange alert against the threat of aggression of Colombia against Venezuela” on Tuesday, two days after Communications Minister Jorge Rodriguez presented satellite photos charging Colombia with harboring terrorist training camps. The maneuvers are set to take place in the states of Zulia, Tachira Apure and Amazonas, which make up the 2,219 kilometers (1,379 miles) of Venezuela’s shared border with Colombia. In addition, Maduro said he lamented the rearmament of a dissident group of the Revolutionary Armed Forces of Colombia (FARC) guerrilla, adding that Venezuela has always wanted peace to be achieved in the civil conflict that has been raging on in the neighboring country for more than half a century. Meanwhile, the US Air Force has completed its first deployment to Guyana in over a decade, having sent 600 service members on a four-month humanitarian outreach mission with an eye toward forging a lasting alliance with the country’s military. (RT: https://www.rt.com/news/468061-venezuela-missile-defenses-colombia-border/; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2482869&CategoryId=10717; Reuters, https://www.reuters.com/article/us-venezuela-politcs/venezuelas-maduro-warns-of-colombia-attack-orders-military-exercises-idUSKCN1VO2I6)

 

Maduro’s military exercises on border a 'threat': Colombia Minister

The Maduro regime's planned border military exercises are a direct threat to regional stability, Colombia's foreign minister said on Wednesday, as the neighboring countries renewed their frequent verbal sparring over security. Nicolas Maduro late on Tuesday ordered the armed forces to be on alert for a potential attack by Colombia and announced military exercises on the border, after a group of former guerrilla commanders said they would rearm. Former Revolutionary Armed Forces of Colombia (FARC) guerillas last week announced a rearmament in a video that Colombian authorities believe was filmed in Venezuela, spurring concern of a worsening of the Colombian armed conflict and expansion of armed groups in Venezuela. "It is a threat that reflects the consistent bad actions of a (Maduro) government which creates crisis situations," Foreign Minister Carlos Holmes Trujillo told journalists. "It's a threat that doesn't just have to do with Colombia, but with the stability and the tranquility of the region." "The dictatorial regime (of Maduro) favors the presence in its territory of terrorist organizations, not just Colombian ones, but from other parts of the world," Holmes added. (The New York Times: https://www.nytimes.com/reuters/2019/09/04/world/americas/04reuters-venezuela-politics-colombia.html; Reuters, https://www.reuters.com/article/us-venezuela-politics-colombia/venezuela-military-exercises-on-border-a-threat-colombia-minister-idUSKCN1VP2H6)

 

Ivanka Trump visits Venezuelan migrant camp in Colombia as US increases aid

Ivanka Trump visited a migrant camp in Colombia on Wednesday as part of an official U.S. delegation, as Washington boosts humanitarian assistance for the millions of people who have fled Venezuela’s collapsing economy. The Trump administration will increase assistance by US$ 120 million to provide emergency food and health care to Venezuelans throughout the region, according to State Department officials. That brings the total donated by the U.S. to address the crisis since 2017 to US$ 376 million, they said. Ivanka Trump, who is an adviser to her father, President Donald Trump, visited Cucuta on Wednesday -- a Colombian border city that is the first destination for many migrants leaving Venezuela by land. She was joined by U.S. Deputy Secretary of State John Sullivan. Sullivan and Ivanka Trump are making diplomatic visits to Colombia, Paraguay and Argentina this week. In Cucuta, they met with Julio Borges, who is International Affairs Commissioner for interim president Juan Guaido, who has been recognized by the U.S. and more than 50 other countries as Venezuela’s rightful head of state. Sullivan reiterated the U.S.’s support of Guaido, saying “we are determined to not yield in our commitment.” Ivanka Trump paid tribute to the female Venezuelan leaders, calling them “warriors.” She also met with Venezuelan women who had crossed into Colombia, some seeking health care they couldn’t access in their home country. Colombian Vice President Marta Lucia Ramirez visited the migrant center with the American delegation. When asked whether the U.S. is doing enough, Ramirez said: “I have to say sincerely the U.S. government is the one doing the best, but it never is enough.” Ramirez urged European nations to match U.S. sanctions on the Maduro regime. (Bloomberg: https://www.bloomberg.com/news/articles/2019-09-04/u-s-boosts-venezuela-migrant-aid-as-diaspora-passes-4-million; Reuters, https://www.reuters.com/article/us-colombia-usa/u-s-to-give-additional-120-million-to-help-venezuelan-migrants-idUSKCN1VP30F)

 

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.